SEC Company Response from OCEAN WEST HOLDING CORP (CIK 0001104538) — Oct 27, 2005
OCEAN WEST HOLDING CORP (CIK 0001104538)
Date: Oct. 27, 2005 · CIK: 0001104538 · Accession: 0001144204-05-032872
AI Filing Summary & Sentiment
File numbers found in text: 000-49971
Referenced dates: October 24, 2005
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885 Third Avenue
Suite 2800
New York, NY 10022
Main (212) 451-2900
Fax (212) 451-2999
ROBINSON & COLE
Mr. Timothy Geishecker
October 27, 2005
October 27, 2005
Via EDGAR and Facsimile
Ms. Timothy Geishecker
Division of Corporation Finance
U.S. Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549
Re: Ocean West Holding Corporation Preliminary Information Statement first
filed July 18, 2005 File No. 000-49971
Dear Mr. Geishecker:
In connection with the above-referenced matter and on behalf of our client
Ocean West Holding Corporation (the "Company"), this is in response to your
letter dated October 24, 2005. We will address your comments in the order in
which they appear in your letter. Wherever reference is made to the amended
Information Statement, it refers to the amended Schedule 14C which we advised
you will be filed shortly under a separate cover letter.
General
1. On behalf of OWHC, we are hereby confirming to you that the spin-off of
Ocean West Enterprises ("OWE") has not yet occurred. The Information
Statement will be revised to reflect that OWE will be spun-off to the OWHC
shareholders of record as of May 23, 2005. The Securities Exchange
Agreement and Plan of Reorganization, dated as of April 5, 2005 (the
"Exchange Agreement") provided that the spin-off was a condition to the
completion of the reverse merger (the "Transaction"). Only the then
existing shareholders of OWHC and not the new investors were entitled to a
dividend of OWE Stock. Therefore, a May 23, 2005 date was chosen prior to
the completion of the Transaction on June 6, 2005. Since the Transaction
was otherwise completed, we erroneously stated in the preliminary
Information Statement that the spin-off had already occurred. While it has
been authorized, no shares have been distributed and will not be prior to
compliance with the Federal securities laws, as set forth below. It is our
belief that the OWE spin-off meets the conditions set forth in Staff Legal
Bulletin No. 4 (CF) dated September 16, 1997 (the "Bulletin") and that the
shares to be distributed to the shareholders of OWHC need not be
registered.
<PAGE>
Mr. Timothy Geishecker
October 27, 2005
Page 2
We believe that OWE, the subsidiary, does not have to register the
spin-off under the Securities Act of 1933, as amended (the "Act") for the
following reasons in the same order as enumerated in the Bulletin:
1. The shareholders of OWHC are to receive the shares of OWE for no
consideration. It is our opinion that the spin-off will not involve
a "sale" as such term is defined under Section 2(3) of the Act
because there will be no disposition by OWHC for value and it will
not consist of a new investment decision by OWHC shareholders
receiving OWE securities. In fact, OWHC shareholders are merely
receiving OWE common stock as a dividend. Thus, registration of the
spun-off securities is not required under Section 5 of the Act.
In a series of no-action letters, citing the issues discussed in the
Bulletin, the Staff has consistently taken the position that stock
distributed in a conventional spin-off transaction, like OWE, absent
fraud, is not required to be registered under the Securities Act.
See, e.g., WMS Industries, Inc., available February 25, 1997;
Tele-Communications, Inc., available November 12, 1996; Consolidated
Freighways, Inc., available November 6, 1996; Olin Corp., available
October 15, 1996; The Dun & Bradstreet Corp., available October 15,
1996; Interpoint Corp., available September 25, 1996; Host Marriott
Corp., available December 19, 1995; Dole Food Company, Inc.,
available December 8, 1995; ITT Corp., available August 23, 1995;
The Promus Companies, Inc., available April 21, 1995; ITT Corp,
available February 3, 1994; and Marriott Corp., available March 19,
1993.
2. The spin-off is pro rata to the parent shareholders of record as of
May 23, 2005.
<PAGE>
Mr. Timothy Geishecker
October 27, 2005
Page 3
3. OWHC has and will provide adequate information to its shareholders
and the trading markets. Since OWE is not a reporting company, it
will provide the Shareholders an Information Statement which
discloses the spin-off and the subsidiary. Prior to the completion
of the Transaction, the sole business of OWHC was that of OWE. While
OWE was not a reporting subsidiary, the sole business of OWHC
discussed in OWHC's periodic reports was that of OWE. Thus, the
marketplace already has available all of the annual, quarterly and
current information intended by the Securities Exchange Act of 1934,
as amended (the "Exchange Act"). Information on the spin-off will be
provided in or accompanythe Information Statement. An amended
Information Statement will be filed by OWHC which substantially
complies with Regulation 14C under the Exchange Act and describes
the spin-off and OWE.
The second-half of the third condition of the Bulletin, is for the
subsidiary to register the spin-off securities under the Exchange
Act. OWE will need to register under the Exchange Act as OWHC had
1206 shareholders of record as of September 12, 2005.
Notwithstanding that requirement, we are of the opinion that the
securities of OWE may be deemed to be registered under Section 12(g)
pursuant to the exemption provided by Rule 12g-3(a) under the
Exchange Act. Specifically, in connection with a succession by a
merger, securities of an issuer that are not already registered
(OWE) are issued to the holders of any class of securities of
another issuer (OWHC) that is registered pursuant to Section 12(g),
the class of securities so issued shall be deemed to be registered
under the same paragraph of Section 12 of the Exchange Act
(exemptions do not apply). In any event, until such time as the
Information Statement is effective and the spin-off securities are
distributed they will be held in escrow by OWE's transfer agent or a
third party custodian.
4. The valid business purposes for the spin-off are set forth in the
Information Statement under "The Boards' Reasons for Engaging in the
Transaction - Ocean West's Reasons for the Merger." Specifically, in
the second paragraph under the above heading, OWE concluded that its
business was better of as a private company, than as a public
company. This analysis revealed that there was virtually no benefit,
with tremendous expenses to OWE in being a public company.
Furthermore, there was no public market for OWHC stock and no
interest in anyone funding OWHC as a public company. Therefore, the
management of OWE resigned from all positions with OWHC and will
wish to continue to run OWE as a private entity.
<PAGE>
Mr. Timothy Geishecker
October 27, 2005
Page 4
On the other hand, none of the three enumerated purposes which are
not valid business purposes apply to OWHC. Specifically, no market
was intended to be created in the spun-off securities as a primary
purpose of the Transaction was to take OWE private. However,
adequate information concerning OWE has been provided to the
shareholders of OWHC through the completion of the Transaction and
via the definitive Information Statement to be mailed.
Notwithstanding the foregoing, as described above, even if OWE is
obligated to file a Form 10 Registration Statement under the
Exchange Act, there can be no assurance a market will develop in the
spin-off securities. Both OWE and OWHC are now operating companies
and neither has minimal operations or assets and neither is a
development stage blind pool.
5. OWHC has held the stock of OWE since March 11, 2002, and management
believes it has satisfied all of the above conditions so that
registration is not required.
2. This comment has been complied with. References to Documents Incorporated
by Reference have been deleted from the Information Statement. In its
place are references to the documents that accompany the Information
Statement.
3. This comment has been complied with. A Summary Term Sheet and Table of
Contents has been added.
4. This comment has been complied with. Disclosure has been made that shares
held by all pre-Transaction affiliates and their transferees cannot be
sold without a registration statement. This discussion lists the
affiliates and the number of shares each holds of OWHC. Vertical Capital
Partners and Global Asset Management, an affiliate of Vertical, have
confirmed to OWHC that their shares issued in connection with the merger
bear a restrictive legend and will not be sold except pursuant to a
registration statement. No shareholder known to OWHC to be an affiliate at
the time of the Transaction has publicly sold any securities of the
Company, nor will they be permitted to do so without registration.
<PAGE>
Mr. Timothy Geishecker
October 27, 2005
Page 5
5. The audit, nominating and corporate governance and compensation committees
will be put in place prior to the end of this year.
Very truly yours,
ROBINSON & COLE LLP
Elliot H. Lutzker
cc: Darryl Cohen,
President and Chief Executive Officer
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