Attention, CFOs at smaller, publicly listed companies overburdened by compliance costs (and facing delisting pressure): The dark side is waiting.
Just as the “Should we go private?” considerations arose at many smaller public companies following the Sarbanes-Oxley Act's passage in 2002, the “Should we go dark?” question is being asked during the global financial crisis, which is ushering in a brand-new era of regulation (or, as I heard an extremely visionary consulting firm chairman describe it today, “the era of re-regulation”).
To be sure, “going dark” is not the same as “going private,” take it from Dorsey & Whitney LLP Partner Theodore Farris, an expert on delisting processes.
“A â€˜going private' transaction generally involves the cash-out of all or a substantial portion of a company's public shares so that the company becomes eligible to delist and deregister its shares under the Exchange Act,” Farris explains in his new article. "â€˜Going private' transactions can take many forms and may involve a merger, tender offer, or reverse split of the company's shares. â€˜Going private' transactions require extensive and detailed disclosure filings under Rule 13e-3, the â€˜going private' rule. â€˜Going private' transactions are often undertaken by or at the direction of controlling shareholders or third-party acquirers and require extensive board consideration, disclosure, fairness opinions, SEC filings, and often a shareholder vote.”
For Farris's complete article, click here. ###