Consider this scenario: Staying Alive, Inc., a publicly traded clothing company based in South Beach, Florida, is planning to offer additional shares to the public in a registered securities offering. Several weeks before launching the offering, Staying Alive’s board of directors decides to put the company’s leisure suit division up for sale. Management intends to sell the division within the next few months and has already started talking to potential buyers.

Staying Alive is already working with its auditors to sort out the accounting issues surrounding the sale. But the company and its underwriters have turned to you to ask how the planned sale will affect the upcoming offering. In particular, they want to know whether (and when) Staying Alive will have to revise its historical financial statements and narrative disclosure to show the leisure suit division as a discontinued operation, which could have timing implications for the deal.

See full alert below:

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Topics:  Filing Requirements, Mergers, Pre-Merger Filing Requirements

Published In: Business Organization Updates, Mergers & Acquisitions Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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