S7-19-04From: Lorne, Simon [slorne@mlp.com]
Sent: Thursday, May 06, 2004 5:57 PM
To: rule-comments@sec.gov
Subject: S7-19-04

Ladies and Gentlemen: 

        I write this comment solely in my individual capacity, and not on 
behalf of my firm or any organization with which I may be associated.

        Congratulations.  The proposed amendments to Form S-8 availability and 
to Form 8-K are a simple and elegant solution to what has been a thorn, albeit 
a thorn of relatively minor importance,0 in the side of effective securities 
regulation for years.  I commend you.

        I would suggest one small clarification.  The second part, clause (2), 
of the definitions of "shell company" currently refers to a registrant with 
"assets consisting solely of cash and cash equivalents."  Just as nominal 
assets properly are an alternative to no assets in clause (1), there will be 
potantial arguments that no corporation has "solely" cash or equivalent 
assets.  (Indeed, the fact of the merger would suggest that dispersed 
ownership is itself an asset, with a demonstrable value to the extent the 
shell owners receive something greater than the value of the pre-merger cash.)  
Perhaps the following would address the issue:

Shell company: The term shell company means a registrant which has: 

(1) No or nominal operations; and  

(2) No or nominal assets, other than cash and cash equivalents, reflected on 
its most recent balance sheet prepared in accordance with Generally Accepted 
Accounting Principles.  

        With respect to the specific questions posed as to the domestic 
application of the proposal, I would provide an exclusion for mergers intended 
solely to provide for a change of domicile, but would otherwise avoid any of 
the other alternative formulations as adding unnecessary complexity. 

        I do not address here the questions posed regarding foreign entities. 
        Yours sincerely, 
        Simon M. Lorne