During the aftermath of the great recession, many companies have become delinquent in their periodic quarterly (“10-Q”) and annual (“10-K”) securities filings because they could not raise enough capital to pay the multitude of professionals involved with their public company reporting.  As many commentators have noted, the Securities and Exchange Commission (“SEC”) generally requires later…

The National Law Review posted an article written about the Lyondell Shareholder Clawback Litigation.  The Bradshaw Law Group represents individual defendants in this matter for a low annual flat fee.  Contact Gil@bradshawlawgroup.com if you need representation in this lawsuit.   Attacking LBO (Leveraged Buyout) Payouts as State Law Fraudulent Transfers   The United States Bankruptcy…

Lyondell: Is the Safe Harbor Closed to Former Shareholders of LBOs (Leveraged Buyout)? In a recent decision by the United States Bankruptcy Court for the Southern District of New York, Weisfelner, v. Fund 1, et al. (In re Lyondell Chem. Co.), 2014 Bankr. LEXIS 159 (Bankr. S.D.N.Y. January 14, 2014), the Court determined, among other things, that Section 546(e)…

Former Lyondell shareholders may be set back by recent developments in the Lyondell bankruptcy case leaving Lyondell shareholders open to creditor fraudulent conveyance claims. Law360, New York (January 27, 2014, 1:17 PM ET).  Lisa Schweitzer writes, “On Jan. 14, 2014, the U.S. Bankruptcy Court for the Southern District of New York held that the Bankruptcy…

DWAC stands for Deposit/Withdrawal at Custodian. It is an electronic transaction system run by  The Depository Trust Company (DTC) that makes it possible to transfer new shares or paper share certificates between broker/dealers or custodial banks, the DTC participants, and the issuer’s transfer agent.  The DTC is, thus, “a clearinghouse settling trades in corporate and…

A stock transfer agent is an agency, usually a bank, that keeps track of the individuals and entities that own the stock and bonds of a corporation.  Sometimes a corporation will act as its own transfer agent. The role of a transfer agent is divided into three general categories: issuing and canceling certificates, acting as…

Reasonable Steps to Verify Accredited Investor Status. Rule 506(c) as adopted contains both a general requirement that issuers take “reasonable steps” to verify that purchasers are accredited investors, as well as a non-exclusive list of methods that can be used to satisfy this requirement. As originally proposed, Rule 506(c) did not mandate a particular verification process…

The “bad boy” provisions have been added as a new paragraph (d) to Rule 506. These provisions disqualify an offering from utilizing the Rule 506 exemption from registration if certain persons related to the issuer or the offering have engaged in specified “bad acts.”  The disqualification provisions apply to offerings under Rule 506(b) and Rule…

Tacking can be a complicated analysis and must be reviewed in light of all of the facts and circumstances. Generally, the “tacking” concept of Rule 144 permits a holder of restricted securities to aggregate the separate holding periods of prior owners of the restricted securities in order to satisfy the holder’s applicable holding period requirement….

When you acquire restricted securities or hold control securities, you must find an exemption from the SEC’s registration requirements to sell them in a public marketplace.  Rule 144 allows public resale of (1) unregistered securities, which are securities directly from an issuer, referred to as “restricted” securities; and (2) unrestricted securities held by an affiliate of…

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