Facebook Fairness Hearing Back In The News

Last August, the Department of Corporations approved the acquisition of Instagram, Inc. by Facebook, Inc. following a fairness hearing.  See DOC Calls It Fair.  According to this Los Angeles Times story by Salvador Rodriguez, Facebook officially closed the acquisition a few days later.  Although I would have expected that to have been the end of the matter, the

DOC Calls It Fair

Notes on the Facebook fairness hearing At the conclusion of a hearing held yesterday morning, the Department of Corporations approved the acquisition of Instagram, Inc. by Facebook, Inc.  Technically, the Department approved the issuance of a permit to offer and sell the securities.  The hearing was was held pursuant to Corporations Code Section 25142.  See A

A Program Guide To The Facebook Fairness Hearing

As discussed in this earlier post, Facebook, Inc. has requested a fairness hearing before the California Department of Corporations.  Technically, the hearing is being held pursuant to Corporations Code Section 25142 in connection with Facebook’s application for a permit authorizing the issuance of securities to effect its proposed acquisition of Instagram, Inc.   Since a permit may

Facebook “Likes” California’s Fairness Hearing Process!

In this video from January 2011, I spoke about California’s fairness hearing procedure.  California is one of only a handful of states that offer the opportunity to take advantage of the Section 3(a)(10) exemption from registration under the Securities Act of 1933.  This exemption is most typically used by public issuers who wish to acquire a

DOC Finds A Reorganization Can Include A Rehabilitation

Until last year, Ambac Assurance, a Wisconsin domiciled insurer, was one of the largest monoline insurers in the world.  Originally it insured low-risk, public finance bonds.  However, in the 1990s it started to offer financial guarantee insurance on residential mortgage backed securities and collateralized debt obligations of asset-backed securities.  Not surprisingly, Ambac was a casualty of the

California’s 50/90 Rule – When Being In Control May Mean That You’re Not

Many out-of-state practitioners are surprised to learn that California has special statutory provisions governing a merger when a constituent corporation (Section 161) or its parent (Section 175) owns, directly or indirectly, more than 50%  of the voting power (Section 194.5) of the other constituent corporation prior to the merger.  This is the so-called “50/90 Rule”.   It can be  found in the last

Fairness Hearings – Shell Companies Need Not Apply

In recent weeks, a number of stories have appeared in the press regarding “reverse mergers” involving shell corporations and Chinese companies.  For example, Joshua Gallu wrote this story for Bloomberg last December. After the Securities and Exchange Commission adopted rule amendments in 2005 governing the use of Forms S-8, 8-K and 20-F by shell companies,

Video: Fairness Hearings: A Faster, Cheaper Alternative To Federal Registration

Video - Fairness Hearings

Watch the video A California fairness hearing can be a faster, cheaper alternative to federal registration under the Securities Act of 1933.  Although fairness hearings can be used in a variety of situations, they are most often used by publicly traded companies using their own securities to acquire another company.  According to the Department of Corporations, the approximate

Fairness Hearings: Not Just For Reorganizations

California attorneys are fortunate to have a wealth of resources at their disposal.  One of these treasures is the Continuing Education of the Bar – California (CEB).  The University of California and the State Bar of California founded CEB more than 60 years ago.  CEB is, however, self-supporting.  Among numerous other publications, the CEB publishes

Want A Fairness Hearing But Paying In Cash – No Problem?

In yesterday’s post, I mentioned California Corporations Code Section 1001(d).  That statute imposes a super-majority shareholder approval requirement for sale of assets transactions covered by Section 1001(a) when the acquiring entity is in “control” of or under common control with the corporation disposing of the assets.  The vote required is 90% of the voting power of the disposing corporation.  “Control”