Client Alert: First-Ever South Carolina Securities Division Fairness Hearing Facilitates Successful S.C. Bank Merger

Banking & Financial Institutions Client Alerts

Client Alert

South Carolina corporations, and, in particular, bank holding companies that are contemplating mergers or acquisitions through the exchange of securities and/or cash, may be able to avail themselves of a little known and, until recently, never used provision of the South Carolina Securities Act – the “Fairness Hearing.”  The use of the fairness hearing process, and the exemption from registration that it provides, could result in considerable cost and time savings to acquirers looking to grow through strategic combinations.  Wyrick Robbins recently represented a South Carolina-domiciled bank holding company involved in negotiations to acquire another South Carolina bank and which requested, and received, the first-ever fairness hearing held by the South Carolina Securities Division.  In this case study, David Jonson of the firm’s Banking & Financial Institutions practice group (and a former Deputy Attorney General and Deputy Securities Commissioner for the State of South Carolina) explains the regulatory framework facing an acquirer seeking to issue securities to a target’s shareholders and provides a first-hand account of how the strategic choice of engaging the fairness hearing process was a significant factor in the successful consummation of the merger transaction.