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WITHDRAWAL FROM REGISTRATION AND STRIKING FROM

LISTING Continued

Scope of Commission's Power

Since Commission must determine what, if any, terms or conditions are appropriate for protection of investors, where applicant fails to furnish sufficient information as to the motives for its application, held, decision upon the application will be suspended until the applicant has submitted the necessary information ... Page 995.

Where it appears that the application for delisting was made because the president of the applicant felt that he could dispose of his holdings more proStably in the over-the-counter market, but where this fact was not disclosed either to the Commission or to the security holders, held, consideration of the application would be deferred until the applicant had submitted a full statement of the facts to the security holders, and such security holders should have an opportunity to present their views as to the imposition of terms and conditions on the withdrawal ... Page 995.

Where registrant's application to withdraw its no par value preferred stock and no par value common stock from listing and registration on an exchange (1) disclosed adequately the material facts with respect to volume of trading and the annual expenses incident to registration and listing, (2) indicated that the trading in securities could be handled adequately in over-the-counter market, and (3) conformed to the Commission's rules and the rules of the exchange, held that the Commission cannot refuse to grant the application, and that no terms for the protection of investors are required, other than a condition that the delisting be not effective until 10 days after the date of the Commission's order ... Page 1014.

Where the registrant's application to withdraw its common stock from listing and registration on two exchanges (1) disclosed adequately the material facts with respect to sales and expected volume of trading, and also the annual expenses incident to registration and listing; and (2) conformed to the Commission's rules and the rules of the two exchanges, neither of which objected to the withdrawal from listing, held that the Commission cannot refuse to grant the application, and that no terms for the protection of investors are required, other than a condition that the delisting be not effective until 10 days after the date of the Commission's order ... Page 1017.

PROCEEDINGS BY COMMISSION

Failure to File Adequate Annual Report

Where the annual report of the company on Form 10-K for a certain fiscal year failed to include the accountants' certificate, held necessary and appropriate for the protection of investors to withdraw the registration of the company's securities pursuant to Section 19 (a) (2) . Page 1020. Failure to File Annual Report

Where registrant failed to file annual report as required by Section 13 of the Act and rules and regulations promulgated thereunder, held necessary and appropriate for the protection of investors to withdraw the registration of the company's securities pursuant to Section 19 (a) (2)... Pages 125, 829, 1020. False and Misleading Statements in Reports

Where issuer admits that answers to items in its reports filed in conformance with Sections 12 and 13 of the Act contain false and misleading statements held grounds for delisting security... Page 209.

WITHDRAWAL FROM REGISTRATION AND STRIKING FROM

LISTING—Continued Responsibility for False Statements

Where a carrier in reorganization is operated by a trustee in bankruptcy, and the statements required under the Act are filed not by the trustee but by the corporation, the latter assumes responsibility therefor . . . Page 268. Untrue Statements in Reports

A balance sheet statement of a railroad in bankruptcy, which fails to disclose a contingent liability of a large amount and unusual nature in accordance with the requirements of the Interstate Commerce Commission, is materially false and misleading . . . Page 268.

All information required in answer to each item in a registration statement filed pursuant to Section 12 of the Act must be complete and accurate in itself, either through a full statement of the relevant facts or by appropriate cross reference to other portions of the registration statement where the facts are stated . .. Page 268. PUBLIC INTEREST

Where it appears that the false and misleading statements in issuer's reports filed under Sections 12 and 13 of the Act have been corrected and that several of the officers and directors responsible for these false statements have resigned, and where the existing security holders would be damaged by delisting, held the proceedings will be dismissed, without prejudice to any future proceedings . . . Page 209. TERMS

Where an issuer seeks to withdraw its securities from listing and registration on an exchange because a curtailment of operations has necessitated a general reduction of expenses, and because the present volume of trading can be handled through a local exchange, held, the application will be granted without imposition of terms . . . Page 329.

Where an exchange seeks to delist bonds which have not been deposited pursuant to a refunding plan on the basis that the amount outstanding has been so reduced as to make further trading on the exchange inadvisable, and where the provisions for retirement of the bonds afford some measure of protection for the maintenance of the price level, held, the application will be granted 90 days from date . . . Page 344.

Where the exchange applied for delisting of a security on the ground that the security was no longer suitable for exchange trading because of its small market value and limited distribution, held, the application should be granted without terms . . . Page 636.

Where the issuer and certain security holders object to the delisting of the security, but fail to suggest any terms which may be imposed upon the granting of the application, held, where the application complies with the rules of the exchange and the regulations of the Commission, it will be granted without terms ... Page 636.

Where protesting security holders contend that delisting will coerce them into exchanging their security for another listed security of the company with inferior rights on distribution, but where the offer of exchange is no longer generally open and the corporation is in reorganization in bankruptcy, held, the imposition of terms is not necessary or appropriate for the protection of investors . . . Page 1059.

PART III

PUBLIC UTILITY HOLDING COMPANY AOT* OF 1935

ACCOUNTING

Where charges were made on the books of a registered holding company to the capital surplus account on account of cancelation of debts owed by subsidiaries and affiliated companies to the registered holding company, and credits to that account were made for the cancelation of debts by its stockholders, held, that losses resulting from cancelation of debts owed to the registered holding company should have been charged to earned surplus, and insofar as the company charged such losses to capital surplus rather than earned surplus, it freed the latter account of charges properly allocable to it ... Page 605.

Where registered holding company had charged losses from sale of investments to capital surplus, held that sound accounting principles require that such losses shall be charged to earned surplus and that the earned surplus account of the registered holding company was inflated to the extent of its losses on the sale of its investments ... Page 605.

BASIS OF RECORDING INVESTMENTS ON BOOKS

Application, having been filed by a registered holding company pursuant to Instruction 8C of the Uniform System of Accounts for Public Utility Holding Companies, requesting approval of a proposed entry to record the transfer to the registered holding company of the assets of a dissolved subsidiary company, the accounting entry having the effect of substituting the subsidiary company's assets, with certain adjustments, in place of the carrying value of the latter's stock, approval granted, it appearing to the Commission that the amounts at wbich the holding company will record the acquisition of the assets by the proposed entry are not unreasonable and from an accounting standpoint appear justified ... Page 331.

Where Commission approved accounting entry to record the acquisition of Assets by a registered holding company and the Commission made no independent valuation of the assets acquired, its order should not be construed as a determine tion of the proper values of the assets acquired, nor a determination of the values of the holding company's other investments ... Page 331.

*The term "Act” as used in Part III of this Digest refers to the Public Utility Holding Company Act of 1935. 6 S. E, C.

1145

ACQUISITION OF ASSETS BY REGISTERED HOLDING COMPANY

OR SUBSIDIARY

Application, having been filed by a registered holding company pursuant to Section 10 of the Act, for approval of the acquisition of all the property and assets of its subsidiary company, the service areas of both companies being contiguous, their lines being interconnected at two points, and it appearing that substantial economies in operation can be effected by the elimination of & corporate entity, approval granted, subject to certain conditions, it appearing to the Commission that the provisions of Section 10 have been complied with and are satisfied ... Page 247.

Application, having been filed by a subsidiary of a registered holding company pursuant to Section 10 of the Act for approval of the acquisition of all the property and assets of its subsidiary ice company, approved, subject to certain conditions, it appearing to the Commission that the provisions of Section 10 have been complied with and are satisfied . . . Page 247.

ACQUISITION OF SECURITIES BY REGISTERED HOLDING

COMPANY OR SUBSIDIARY

Application, having been filed by an operating company pursuant to Section 10 (a) (1) of the Act for approval of the acquisition of 15,990 additional shares of common stock of its subsidiary, approval granted, subject to certain conditions, the Commission viewing the acquisition in the light of related transactions, and finding with respect to Section 10 (c), that there was sufficient evidence to conclude that the acquisition would tend toward the economical and efficient development of an integrated public utility system, the Commission making no adverse findings under Section 10 (b)... Page 38.

Application filed by a registered holding company, pursuant to Section 10 (a) (1) and Rule U-12B-1 with respect to the acquisition of a $4,400,000 note and the extension of credit to a foreign associate company, approved subject to certain conditions, the Commission finding that the proposed acquisition will in no way complicate the capital structure of the holding company system of the applicant, nor be detrimental to the interest of investors or consumers, or the proper functioning of such holding company system . .. Page 72.

Where new corporation might be formed pursuant to the terms of plan of simplification of corporate structure of registered holding company, the new corporation to acquire all the property owned by the registered holding company and assume all of the liabilities and obligations of the company in return for such an amount of common stock of the new company as will be necessary to consummate the proposed plan, found, with reference to Section 10 (c) (1) that the proposed transaction is not detrimental to the carrying out of the provisions of Section 11, and that the carrying out of the plan will facilitate compliance in the future with the provisions of Section 11 (b) (1) thereby serving the public interest in accordance with Section 10 (c) (2) of the Act, and the Commission finding that an acquisition under the plan meets the standards of Section 10 (f) of the Act . . . Page 182.

6 S.E.C.

ACQUISITION OF SECURITIES BY REGISTERED HOLDING

COMPANY OR SUBSIDIARY_Continued Application, having been filed by a registered holding company pursuant to Section 10 of the Act, for approval of the acquisition by it of securities consisting of notes and common stock to be issued and delivered by two of its subsidiaries, approved, subject to certain conditions, the Commission finding that the proposed acquisition will serve the public interest by tending toward the economical and efficient development of an integrated public utility system

Page 231. Application, having been filed pursuant to Section 10 of the Act for approval of the acquisition of securities of two subsidiary companies of a registered holding company, the purchaser being a director and president of both of the subsidiary companies but owning no securities of any of the companies, approved, the Commission finding that upon the consummation of the sale, the two subsidiary companies will cease to be subsidiaries of a holding company and that there is little possibility that they will thereafter become involved in any problem under Section 11 of the Act . . . Page 338.

Application, having been filed by a registered holding company, pursuant to Section 10 of the Act for approval of the acquisition of 2,480 shares of $25 par value common stock from its subsidiary company in part payment of an open-account indebtedness, approved, the Commission finding that the acquisition of the common stock represents no change in the existing ownership and is not detrimental to the carrying out of the provisions of Section 11, and since such acquisition tends towards the economic and efficient development of an integrated public utility system, the requirements of Section 10 (c) have been satisfied, the Commission making no adverse findings with respect to Section 10 (b) ... Page 368.

Application, by a subsidiary of a registered holding company, pursuant to Section 10 (a) (1) of the Act, for approval of the acquisition by it of 3,300 shares of common stock of a newly organized company, approved, subject to certain conditions, it appearing that the proposed transaction will tend toward the efficient and economic development of an integrated public utility system ... Page 419.

Application, having been filed by a subsidiary registered holding company, pursuant to Section 10 of the Act, for approval of the acquisition from its parent company of 1,632 shares of common stock of applicant's subsidiary company, the transaction being part of certain transactions undertaken at the direction of a state commission, application approved, subject to certain conditions, the Commission finding that the acquisition will not be detrimental to carrying out the provisions of Section 11 of the Act, and will tend toward developing an efficient and integrated public utility system ... Page 539. ACQUISITION EXEMPT UNDER RULE U-9C-3 (14)

Application, having been filed by a registered holding company pursuant to Section 10 of the Act, for approval of the acquisition by it of 125,000 shares of common stock of its subsidiary company, held, that the acquisition is expressly exempt under Rule U-9C-3 (14), and the application should be dismissed as moot . .. Page 444.

6 8. E.C.

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