Business
Tower Properties Abandonment of Proposed S-Corporation Conversion
Tower Properties Abandonment of Proposed S-Corporation Conversion.
About this update from Tower Properties Company
[{"type":"text","content":"At the Board of Directors meeting of Tower Properties Company (Company) on October 21, 2008 it was determined that the Company will not be pursuing its conversion to a Subchapter S corporation for the foreseeable future, which would have required a reduction in the number of shareholders to 100 or less and that stock be held only by specified types of qualifying shareholders. The Company previously announced that it was considering this action in order to comply with its obligations under rules of the Securities and Exchange Commission that were triggered by a tender offer for the Company's stock. The Company made this decision in view of the large amount of capital that would be needed to retire shares to meet Subchapter S requirements as well as adverse developments in financial, credit and real estate markets since the earlier announcement. This uncertain environment makes it difficult to value real estate and demonstrates the importance of a strong balance sheet and the need to preserve cash resources for liquidity and for pursuing opportunistic investments in the future. In an effort to reduce expenses, the Company's shareholders overwhelmingly supported the Company's earlier efforts to suspend its reporting obligations under the Securities Exchange Act of 1934, but some shareholders have taken actions that, if combined with similar acts in the future, may result in the Company becoming a reporting company again. If the Company were to become a reporting company again, the Company would again face significant compliance costs, and management would be distracted from the Company's business operations. The Company is continuing to review alternatives to avoid becoming a reporting company again under the Securities Exchange Act of 1934. There can be no assurance that the Company will proceed with any alternative and no reliance should be placed on the possibility that any such alternative would be pursued, or successful if pursued.","length":2725,"tagName":"div"}]