California Code of Regulations
Title 10 - Investment
Chapter 3 - Commissioner of Financial Protection and Innovation
Subchapter 2 - Corporate Securities
Article 4 - Standards for the Exercise of the Commissioner's Authority
Subarticle 6 - Recapitalizations and Reorganizations
Section 260.140.63 - Negotiating Permit in Connection with Recapitalizations and Reorganizations

Normally, no negotiating permit is required or will be issued in connection with a recapitalization or reorganization. Any negotiations prior to general solicitation of shareholders' approval are exempted by subdivision (a) of Section 25103 of the Code. An application for a definitive permit should be made prior to the distribution of the proxy material to the shareholders and normally will be acted upon prior to such distribution. The permit, however, may be conditioned upon the obtaining of an affirmative vote of a specified percentage of the outstanding shares held by persons other than those who have a conflict of interest in connection with the adoption of the plan of reorganization or recapitalization. In extraordinary cases the Commissioner may delay decision on the issuance of the definitive permit until after the shareholders' vote, and in that case a negotiating permit will be issued prior to the solicitation of shareholders' approval without the necessity for any separate application therefor upon payment of the additional fee specified therefor.

1. Renumbering of former Section 260.121 to Section 260.140.63 filed 10-26-84; effective thirtieth day thereafter (Register 84, No. 43).

Note: Authority cited: Sections 25102(c), 25610 and 25612, Corporations Code. Reference: Sections 25102(c), 25140 and 25160, Corporations Code.