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Going-Private Transactions

October 27, 2011

By Steven D. Winegar, David G. Grimm & Tim Y. Sung

Recent market sentiment towards China-based companies publicly-traded in the United States has led to increased interest among such companies to go private. Taking companies private involves cashing-out all or a substantial portion of a companys public shares so that the company becomes eligible to delist and deregister its shares under the Securities Exchange Act of 1934. While a highly regulated process, proper planning should allow a company to navigate the SEC rules and successfully conduct a going-private transaction.  In addition, given the recent heightened scrutiny of China-based companies, thorough and careful preparation of disclosure documents and proper use of procedural safeguards is critically important, particularly in the event of subsequent litigation.

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