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Nevertheless, such a liquidity event could be undertaken in connection with a “going dark” transaction by a company that has the cash resources to offer one, provided that care is taken not to trigger the “going private” rules. Delisting and Deregistration under Section 12(b) The “going dark” rules are simple in conception, but can be complex and highly technical in their practical application. Listed issuers are entitled to delist their securities voluntarily and to deregister them under Section 12(b) of the Exchange Act by filing a Form 25 with the SEC.Procedures for “Going Dark” To understand the “going dark” procedure, it is first necessary to understand what triggers Exchange Act reporting requirements. Exchange, using Rule 12h-6 would not technically be “going dark,” although it would involve withdrawal from the U. The issuer must give notice of its intention to file the Form 25 and issue a press release announcing that intention ten days prior to filing the Form 25.Deregistration under Section 12(g) will become effective 90 days after filing the Form 15.The SEC has the authority to deny such a request for termination, but has rarely done so. Set forth below is a timeline outlining the significant procedural steps in a typical “going dark” transaction for a domestic listed company.
After “going dark,” an issuer’s reporting obligations can be reinstated if the issuer exceeds the limit on the number of record holders on the first day of any fiscal year after it files a Form 15.
In the past there has been some stigma associated with “going dark.” As the current recession has deepened, this negative perception may have less force as companies face the very high costs of remaining a public company in a very difficult business environment.
What “Going Dark” Means “Going dark” refers to the process of voluntarily delisting a public company’s shares from a national securities exchange or inter-dealer quotation system (if so listed or quoted) and subsequently deregistering the shares under the Exchange Act, thus suspending or terminating the company’s public reporting obligations under the Exchange Act.
A “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.
“Going private” transactions can take many forms and may involve a merger, tender offer or reverse split of the company’s shares.
The company issues a press release announcing deregistration.