Fishing Club (FC) wishes to raise $6 Million so that it can purchase Snake Falls Ranch. The family members that currently own the ranch are willing to sell their family Snake Falls Ranch Corporation to the FC for $6 Million, even though the ranch has been appraised for $9 Million. They value the preservation of the property and do not wish to see it developed. This purchase will allow the FC to have fishing access to 6 miles of trout stream and as well as help preserve the ranch property and Snake River in Nebraska as it is one of a very few naturally reproducing trout streams in the state. FC has 110 members, mostly Nebraska residents who are die hard fly fishermen but some members live in Iowa, Texas, Colorado, Kansas, and South Dakota. The FC does not wish to issue registered securities and do a public offering because of the high cost of a public issue. Instead, the FC wishes to raise the necessary funds through an Exempt Transaction under the 1933 Act. Which Exempt Transaction would work best in this situation for the FC to raise the necessary funds and why. What limitations or rules would the FC need to comply with when using the chosen exemption under the Securities Act of 1933 in order to legally raise the funds.
Fishing Club (FC) wishes to raise $6 Million so that it can purchase Snake Falls Ranch. The family members that currently own the ranch are willing to sell their family Snake Falls Ranch Corporation to the FC for $6 Million, even though the ranch has been appraised for $9 Million. They value the preservation of the property and do not wish to see it developed. This purchase will allow the FC to have fishing access to 6 miles of trout stream and as well as help preserve the ranch property and Snake River in Nebraska as it is one of a very few naturally reproducing trout streams in the state. FC has 110 members, mostly Nebraska residents who are die hard fly fishermen but some members live in Iowa, Texas, Colorado, Kansas, and South Dakota. The FC does not wish to issue registered securities and do a public offering because of the high cost of a public issue. Instead, the FC wishes to raise the necessary funds through an Exempt Transaction under the 1933 Act.
Which Exempt Transaction would work best in this situation for the FC to raise the necessary funds and why.
What limitations or rules would the FC need to comply with when using the chosen exemption under the Securities Act of 1933 in order to legally raise the funds.
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