SEC Company Response from MERCER INTERNATIONAL INC. (MERC) (CIK 0001333274) (MERC) — Sep 22, 2005
MERCER INTERNATIONAL INC. (MERC) (CIK 0001333274)
Date: Sept. 22, 2005 · CIK: 0001333274 · Accession: 0001012410-05-000073
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 333-126683
Referenced dates: August 17, 2005, August 17, 2005, August 22, 2005, September 12, 2005
Letter
VIA EDGAR, FACSIMILE AND COURIER SECURITIES AND EXCHANGE COMMISSION 100 F Street, N.E., Stop 7010 Washington, D.C. 20549-7010 Attention: H. Roger Schwall, Assistant Director Mail Stop 7010
Dear Sirs/Mesdames:
Re: Mercer International Regco Inc. (the "Company")
Registration Statement on Form S-4
File No. 333-126683
We act as counsel for the Company and write in connection with the comment letter dated September 12, 2005 (the "Comment Letter") from the Securities and Exchange Commission (the "Commission") to Mercer International Inc. ("Mercer") on the Company's Registration Statement on Form S-4 (the "Registration Statement") relating to the conversion of Mercer from a Massachusetts trust to a corporation organized under the laws of the State of Washington (the "Conversion"). On behalf of the Company, we provide the following responses to your comments. For your ease of reference, we have set out below, in italics, the comments contained in the Comment Letter, with the Company's responses following each comment. In addition, we have updated the Registration Statement to reflect the incentive stock grants made to senior management of Mercer as of September 9, 2005, and to clarify certain terms in the merger agreement to conform to the disclosure contained in the Registration Statement, and have also made other minor updates and corrections.
General
1.
We remind you of prior comment 1 from our letter dated August 17, 2005. We also hope to discuss several other issues with you by telephone.
We note your comment and acknowledge your oral comments received on September 14, 2005. In connection therewith we have filed the draft Amendment No. 1 to Form S-4 and our response letter dated August 22, 2005 to your comment letter dated August 17, 2005, both as "CORRESP" via EDGAR. In addition, we have changed the definitions set out in the Registration Statement from "Mercer-DE" to "Transition Co." and from "Mercer-WA" to "Amalgamated Mercer" for greater clarity.
September 22, 2005
Page 2
Material U.S. Federal Income Tax Consequences of the Conversion, page
2.
Refer to prior comments 3, 5, 7 and 8, and make corresponding changes as appropriate.
•
You indicate at page 24 that you have "obtained an opinion" from counsel regarding Section 368(a), but it is unclear where that opinion is to be found.
•
It remains unclear whether you intend to file a short- or long-form opinion as an exhibit. If the former, you must make clear both in the disclosure in this section and in the letter from counsel that you file as an exhibit that the disclosure in this section constitutes the opinion of counsel. For example, revise the last paragraph on page 24 accordingly.
•
It is insufficient for counsel to indicate in exhibit 8.1 that it is providing its opinion "concerning the description" of the material tax consequences. Instead of opining regarding the description, it must provide an opinion regarding the actual consequences. Similarly, the statement at page 2 of exhibit 8.1 that the disclosure "is correct" does not make clear that the referenced disclosure also constitutes counsel's opinion.
•
The references at page 3 of exhibit 8.1 to the specific tax consequences "presented above" and at page 2 to "the opinion set forth below" are unclear due to the incomplete nature of the "opinion" rendered.
•
If you instead intend to summarize the long-form opinion to be provided by counsel, we may have additional comments once we view the changes and the new opinion.
•
If the disclosure in the registration statement is intended to constitute counsel's opinion, ensure that all "assumptions, exceptions, limitations and qualifications" to which counsel refers in exhibit 8.1 appear in the corresponding text in the registration statement. Conversely, if counsel intends the document filed as exhibit 8.1 to constitute a long-form opinion, ensure that all such items appear in that documents and that it does not suggest that the reader needs to look elsewhere to find that information.
The disclosure at page 24 of the Registration Statement has been amended to indicate that the opinion from counsel regarding Section 368(a) is attached as exhibit 8.1.
The opinion attached as exhibit 8.1 will be a short-form opinion. Accordingly, the material U.S. federal income tax section of the Registration Statement has been amended to clarify that the disclosure in this section constitutes the opinion of counsel. In addition, exhibit 8.1 has been amended to clarify that counsel is providing its opinion about the material U.S. federal income tax consequences of the conversion (rather than a description thereof) and that the disclosure in the section on material U.S. federal income tax consequences of the conversion in the Registration Statement constitutes the opinion of counsel. Exhibit 8.1 has also been amended to clarify the opinions being rendered and therefore all references to such opinions should be clear.
Moreover, all assumptions, exceptions, limitations and qualifications referred to in exhibit 8.1 now also appear in the corresponding text in the registration statement.
September 22, 2005
Page 3
3.
We note the new disclosure at page 25. Rather than suggesting that the reader "should consult" with its own tax advisor, you may recommend that course of action.
The new disclosure at page 25 has been amended to recommend that shareholders consult their own tax advisors in the circumstances described.
Exhibit 5.1 - opinion of counsel
4.
Explain to us why the number of shares referenced in the first paragraph of the opinion differs from the number that appears in the fee table in the initial filing.
The number of shares referenced in the opinion has been corrected to reflect the same number of shares that appears in the fee table of the Registration Statement.
5.
We refer you to prior comment 9. Ask counsel to eliminate the corresponding language from the last paragraph of its opinion, along with the suggestion that the opinion is "solely for your benefit".
The last paragraph of the opinion has been amended to delete the suggestion that the opinion is solely for the benefit of the reader and that it may not be relied upon by any other person, firm, corporation or other entity without counsel's prior written consent.
A marked version of the Company's full Registration Statement accompanies this letter for your ease of reference. Only marked pages will be forwarded via facsimile. The Company hopes to have the Registration Statement declared effective as soon as possible and, accordingly, any assistance you can provide in obtaining an expeditious review of this response letter and the amended Registration Statement would be greatly appreciated. We trust the foregoing to be in order but should you have any questions or concerns, please do not hesitate to contact the undersigned or my partner, Harj Sangra at 604-692-3022.
Yours truly,
SANGRA MOLLER LLP
/s/ Stewart L. Muglich
Per:
Stewart L. Muglich
(New York State Bar No. 098563)
SLM/tp
cc. Mercer International Inc.
Attention: David M. Gandossi
Securities and Exchange Commission, Stop 7010
Attention: Timothy Levenberg
Securities and Exchange Commission, Stop 7010
Attention: Carrie Darling
Deloitte & Touche LLP
Attention: Dan Rollins and Gregg Orr
Show Raw Text
CORRESP
1
filename1.htm
Letter to SEC re Mercer International Inc. dated September 16, 2005
SANGRA
MOLLER LLP
B a r r i s t e r s & S o l i c i t o r s
1000
Cathedral Place Reply Attention of:
925 West
Georgia
Street
Stewart L. Muglich
Vancouver,
British Columbia
Canada
V6C 3L2 Our
File No.:
5000066
Telephone:
(604) 662-8808
Facsimile:
(604)
669-8803
Direct Line:
www.sangramoller.com (604)
692-3023
Email:
smuglich@sangramoller.com
September
22, 2005
VIA
EDGAR, FACSIMILE AND COURIER
SECURITIES
AND EXCHANGE COMMISSION
100 F
Street, N.E., Stop 7010
Washington,
D.C. 20549-7010
Attention: H.
Roger Schwall, Assistant Director
Mail
Stop 7010
Dear
Sirs/Mesdames:
Re: Mercer
International Regco Inc. (the "Company")
Registration
Statement on Form S-4
File
No. 333-126683
We act as
counsel for the Company and write in connection with the comment letter dated
September 12, 2005 (the "Comment Letter") from the Securities and Exchange
Commission (the "Commission") to Mercer International Inc. ("Mercer") on the
Company's Registration Statement on Form S-4 (the "Registration Statement")
relating to the conversion of Mercer from a Massachusetts trust to a corporation
organized under the laws of the State of Washington (the "Conversion"). On
behalf of the Company, we provide the following responses to your comments. For
your ease of reference, we have set out below, in italics, the comments
contained in the Comment Letter, with the Company's responses following each
comment. In addition, we have updated the Registration Statement to reflect the
incentive stock grants made to senior management of Mercer as of September 9,
2005, and to clarify certain terms in the merger agreement to conform to the
disclosure contained in the Registration Statement, and have also made other
minor updates and corrections.
General
1.
We remind you
of prior comment 1 from our letter dated August 17, 2005. We also hope to
discuss several other issues with you by
telephone.
We note
your comment and acknowledge your oral comments received on September 14, 2005.
In connection therewith we have filed the draft Amendment No. 1 to Form S-4 and
our response letter dated August 22, 2005 to your comment letter dated August
17, 2005, both as "CORRESP" via EDGAR. In addition, we have changed the
definitions set out in the Registration Statement from "Mercer-DE" to
"Transition Co." and from "Mercer-WA" to "Amalgamated Mercer" for greater
clarity.
September
22, 2005
Page 2
Material
U.S. Federal Income Tax Consequences of the Conversion, page
23
2.
Refer
to prior comments 3, 5, 7 and 8, and make corresponding changes as
appropriate.
•
You
indicate at page 24 that you have "obtained an opinion" from counsel
regarding Section 368(a), but it is unclear where that opinion is to be
found.
•
It
remains unclear whether you intend to file a short- or long-form opinion
as an exhibit. If the former, you must make clear both in the disclosure
in this section and in the letter from counsel that you file as an exhibit
that the disclosure in this section constitutes the opinion of counsel.
For example, revise the last paragraph on page 24
accordingly.
•
It
is insufficient for counsel to indicate in exhibit 8.1 that it is
providing its opinion "concerning the description" of the material tax
consequences. Instead of opining regarding the description, it must
provide an opinion regarding the actual consequences. Similarly, the
statement at page 2 of exhibit 8.1 that the disclosure "is correct" does
not make clear that the referenced disclosure also constitutes counsel's
opinion.
•
The
references at page 3 of exhibit 8.1 to the specific tax consequences
"presented above" and at page 2 to "the opinion set forth below" are
unclear due to the incomplete nature of the "opinion"
rendered.
•
If
you instead intend to summarize the long-form opinion to be provided by
counsel, we may have additional comments once we view the changes and the
new opinion.
•
If
the disclosure in the registration statement is intended to constitute
counsel's opinion, ensure that all "assumptions, exceptions, limitations
and qualifications" to which counsel refers in exhibit 8.1 appear in the
corresponding text in the registration statement. Conversely, if counsel
intends the document filed as exhibit 8.1 to constitute a long-form
opinion, ensure that all such items appear in that documents and that it
does not suggest that the reader needs to look elsewhere to find that
information.
The
disclosure at page 24 of the Registration Statement has been amended to indicate
that the opinion from counsel regarding Section 368(a) is attached as exhibit
8.1.
The
opinion attached as exhibit 8.1 will be a short-form opinion. Accordingly, the
material U.S. federal income tax section of the Registration Statement has been
amended to clarify that the disclosure in this section constitutes the opinion
of counsel. In addition, exhibit 8.1 has been amended to clarify that counsel is
providing its opinion about the material U.S. federal income tax consequences of
the conversion (rather than a description thereof) and that the disclosure in
the section on material U.S. federal income tax consequences of the conversion
in the Registration Statement constitutes the opinion of counsel. Exhibit 8.1
has also been amended to clarify the opinions being rendered and therefore all
references to such opinions should be clear.
Moreover,
all assumptions, exceptions, limitations and qualifications referred to in
exhibit 8.1 now also appear in the corresponding text in the registration
statement.
September 22, 2005
Page 3
3.
We note
the new disclosure at page 25. Rather than suggesting that the reader
"should consult" with its own tax advisor, you may recommend that course
of action.
The new
disclosure at page 25 has been amended to recommend that shareholders consult
their own tax advisors in the circumstances described.
Exhibit
5.1 - opinion of counsel
4.
Explain
to us why the number of shares referenced in the first paragraph of the
opinion differs from the number that appears in the fee table in the
initial filing.
The
number of shares referenced in the opinion has been corrected to reflect the
same number of shares that appears in the fee table of the Registration
Statement.
5.
We
refer you to prior comment 9. Ask counsel to eliminate the corresponding
language from the last paragraph of its opinion, along with the suggestion
that the opinion is "solely for your
benefit".
The last
paragraph of the opinion has been amended to delete the suggestion that the
opinion is solely for the benefit of the reader and that it may not be relied
upon by any other person, firm, corporation or other entity without counsel's
prior written consent.
A marked
version of the Company's full Registration Statement accompanies this letter for
your ease of reference. Only marked pages will be forwarded via facsimile. The
Company hopes to have the Registration Statement declared effective as soon as
possible and, accordingly, any assistance you can provide in obtaining an
expeditious review of this response letter and the amended Registration
Statement would be greatly appreciated. We trust the foregoing to be in order
but should you have any questions or concerns, please do not hesitate to contact
the undersigned or my partner, Harj Sangra at 604-692-3022.
Yours
truly,
SANGRA
MOLLER LLP
/s/
Stewart L. Muglich
Per:
Stewart
L. Muglich
(New York
State Bar No. 098563)
SLM/tp
cc. Mercer
International Inc.
Attention:
David M. Gandossi
Securities
and Exchange Commission, Stop 7010
Attention:
Timothy Levenberg
Securities
and Exchange Commission, Stop 7010
Attention:
Carrie Darling
Deloitte
& Touche LLP
Attention:
Dan Rollins and Gregg Orr