CHAPTER 8 INVESTIGATION AND HANDLING OF THE CORPORATE LIABILITIES AND OBLIGATIONS OF THE ACQUIRED COMPANY

• Jurisdiction: United States

Mergers and Acquisitions of Natural Resources Companies
(Nov 1994)
CHAPTER 8
INVESTIGATION AND HANDLING OF THE CORPORATE LIABILITIES AND OBLIGATIONS OF THE ACQUIRED COMPANY
Robert W. Micsak
Independence Mining Company, Inc.
Englewood, Colorado

ROCKY MOUNTAIN MINERAL LAW FOUNDATION

MERGERS & ACQUISITIONS SEMINAR

SANTA FE, NEW MEXICO

NOVEMBER 11, 1994

Panel Discussion

Hypothetical Case:

:Acquiring Company

• A wholly owned subsidiary ("Buyco") of a large, publicly traded (U.S.) corporation ("Megametal"), primarily engaged in precious and base metals exploration and production activities. Megametal and Buyco are both Delaware corporations with their primary places of business located in Denver, Colorado.

• Megametal has benefit plans (401k, pension, medical, dental) that are applicable to all employees of Megametal and its subsidiaries, including Buyco.

• Buyco's operations are all non-union.

• Megametal wishes to expand its precious metals operations and exploration properties through the contemplated acquisition and to enter into a new line of business through the acquisition of the coal assets described below. Megametal is considering placing the coal assets it acquires in a separate, wholly owned subsidiary, either as part of or following the acquisition.

Target Company and Assets

• A wholly owned subsidiary ("Gold Brick") of a large, publicly traded (U.S.) corporation ("Sellitall") plus an operating coal mine and coal reserves ("Carbon Residue") which are owned by another wholly owned subsidiary of Sellitall ("Hotstuff"). Gold Brick owns operating gold mines located in Nevada and several exploration properties located...