I am glad you clarified for the "record," Kevin,
that you are not short. But you still do not seem
to "get it."
The SEC has NO POWER to "approve" or "disapprove"
AREM's recapitalization plan. Its review of the
proxy statement is procedural in nature and intended
to ensure that applicable disclosure rules are met.
The question whether the recap plan has a "legitimate"
corporate purpose and is a "valid" exercise of the
powers granted the Company's directors is a question
of state, not federal, law on which the Delaware courts,
not the SEC, has the final say.
If the shareholders approve the recap plan, which is
a sure thing, the plan will go into effect unless some
shareholder challenges the validity of the plan in a
Delaware court and the court enjoins the Company from
implementing the plan. The SEC will have NO SAY AT ALL
in determining the validity of the recap plan under
the law of the State in which AREM is incorporated--
Delaware.
The only substantive say the SEC will have in any of this
will be on the question of whether to permit registration
of the new Class A shares for trading and deregistration
of the existing shares. The SEC may impose conditions
on the Company's plan to register the new Class A shares
for trading and deregister the old ones if the agency
finds that such conditions are necessary "for the
protection of investors." But, in exercising its authority
to regulate trading in securities, the SEC does not have
the power to "secondguess" any decision made by AREM and
its shareholders (or, possibly, by the Delaware courts)
regarding what securities to issue in the first place
or what ownership rights and interests will attach to
whatever classes of securities the Corporation issues.
So, if the shorts are counting on the SEC to bail them
out, their confidence is entirely misplaced. |
