An Uncommon Source Of Financing May Precipitate New Disclosure Requirements

Abstract

Large and small holding companies have been raising large amounts of cash by selling off portions of subsidiaries to an eager investing public, according to recent reports in the financial media.  Reintroducing a technique made popular in the late 1960’s known as “carving out” subsidiaries, corporations are tapping an uncommon source of financing-their equity in wholly-owned subsidiaries.