Page 116 - Bankruptcy Volume 1

SEC Reporting Requirements

The SEC Staff Legal Bulletin No. 2 states that debtors are not relieved of their reporting obligations un-
der the Securities and Exchange Act of 1934 (the Exchange Act) because neither the Bankruptcy Code
nor federal securities laws provide such an exemption. However, the SEC may accept reports that "differ
in form or content from reports required to be filed under the Exchange Act (modified reporting)."

In considering whether to accept modified reporting, the SEC will generally consider the difficulty of
obtaining the information necessary to complete the Exchange Act reports, the debtor’s financial condi-
tion, the debtor’s efforts to advise its security holders and the public of its financial condition and activi-
ties, and the nature and extent of trading in the debtor’s securities.

A debtor may rely on this general guidance of the SEC, and should take all steps possible to inform its
security holders and the market of its ongoing financial condition and the status of its bankruptcy pro-
ceedings, including filing any available information with the SEC.

A debtor may also request a "no-action" position from the SEC on the debtor’s intent to use modified
reporting that responds to the SEC’s considerations as previously listed. This request should be made in
the beginning of the bankruptcy case before the first due date of any Exchange Act report, rather than
when emergence is expected.

In evaluating a debtor’s request, the SEC will consider factors, including the following:

 Whether the debtor has complied with its Exchange Act reporting obligations before the bank-
ruptcy filing

 Whether the debtor has made any other efforts to inform the market of its bankruptcy filing in
addition to the required Form 8-K, such as a press release

 Whether the debtor’s Form 8-K announcing its bankruptcy filing was filed on a timely basis

 The underlying reasons preventing the debtor from complying with its Exchange Act reporting
obligations

 Whether the modified reporting is adequate to protect investors

 The nature and extent of trading in the debtor’s securities

Generally, the SEC will accept monthly operating reports as filed with the bankruptcy court under Rule
2015, instead of Form 10-K and Form 10-Q filings, as a modified reporting. The monthly operating re-
ports should be filed with the SEC on Form 8-K within 15 calendar days after filing with the bankruptcy
court.

A "no-action" letter does not excuse debtors from all other required SEC filings, such as those required
using Form 8-K or any reporting under the provisions of proxy, tender offer and going private rules.

In addition, debtors must file Form 8-K under the following circumstances:

 The appointment of any trustee under the Bankruptcy Code

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