SB 741
Authorizing State Auditor to conduct fairness hearings
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- Passed Senate
- Passed House of Delegates
- To Governor
- Became Law
Bill overview
This bill authorizes the State Auditor, or their designee, to conduct fairness hearings related to securities exchanges. Specifically, it allows the State Auditor to review and assess whether proposed exchanges of securities – including swaps of securities for outstanding securities, claims, property interests, or cash – are fair to the equity holders involved. These hearings would be conducted under the Uniform Securities Act and could lead to an exemption from registration requirements for the exchanged securities.
Key provisions
- Authorizes the State Auditor to conduct fairness hearings for securities exchanges.
- Defines ‘reorganization,’ ‘recapitalization,’ and ‘refinancing’ for the purpose of the bill.
- Requires a 30-day timeframe for the commissioner to hold a hearing after an application is filed.
- Allows equity holders (representing a majority of debt or securities) to request a hearing.
- The commissioner must issue an approval or denial within 10 business days of the hearing.
- Securities issued under an approved plan are exempt from registration.
- Applicants must pay a $100 filing fee and may deposit additional funds with the Auditor to cover hearing costs.
- The commissioner can establish rules and classifications for applications and reports.
Who is affected
- Corporations
- Limited Liability Companies
- Security Holders
- The State Auditor’s Office
- The Securities Industry
Notable changes
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