carve-out

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Equity Carve Out

The act or process of a company making an IPO on one of its subsidies without fully spinning off. During an equity carve-out, the parent company becomes majority shareholder and only offers a minority share to the market. This gives the subsidiary a degree of autonomy (such as its own board of directors) while still retaining access to resources at the parent company. Most of the time, an equity carve-out ultimately results in the parent company fully spinning off the subsidy. It is also called a partial spin off.

carve-out

See equity carve-out.

carve-out

An area of personal liability in an otherwise nonrecourse loan.A lender may be willing to accept property as sufficient collateral for a loan, without requiring personal liability on the part of the corporate or individual borrower in case there is a default and the collateral is insufficient to pay the debt.The exceptions,or carve-outs,are for things outside the ability of the lender to analyze during underwriting,such as borrower fraud or environmental claims.

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References in periodicals archive ?

The Adoption of Carve-Out Contracts and Their Hypothesized Impacts on the Utilization of New Medical Technology

Economic incentives and contracts: the use of psychotropic medications

Here, A and B sold their right to all remaining lottery payments; thus, under the Third Circuit's analysis, the sale is a vertical carve-out, which could indicate either capital-gain or ordinary-income treatment.

Sale of lottery payments produces ordinary income

If carve-outs have one distinguishing characteristic, it is their emphasis on alternate dispute resolution and the central role of the carve-out ombudsman in reducing attorney involvement and friction costs.

Carve-Outs in Workers' Compensation: an Analysis of the Experience in the California Construction Industry

Initially, there may be reasons to float a minority stake in a subsidiary through a carve-out instead of floating a majority or full stake.

When carve-outs make sense. (Current Research)

Unlike a spin-off or equity carve-out, a tracking stock doesn't create a new legal entity.

Making sense of Spin-Offs, tracking stock, and equity carve-outs: Equity restructuring techniques differ strategically and financially. (IPOs)

This pilot study points to differences in collaborative relationships and the necessity of increased communication between primary care and mental health providers, especially in settings where primary care providers refer to mental health carve-out programs.

Linkages Between Primary Care Physicians and Mental Health Specialists

An equity carve-out is the sale by a public company of a portion of one of its subsidiaries' common stock through an initial public offering.

The appeal of the equity carve-out

In the event that guarantors will agree to this type of carve-out which may not necessarily be the result of "bad acts" or fall within their control, at a minimum, these carve-outs should not be triggered until applicable notice is given and cure periods have passed and such carve-out should be limited to when the carve-out event has a material adverse effect on the property.

Don't be left holding the bag when good boys go bad

Finally, the participant education carve-out will continue to allow information regarding the plan to be disseminated, but, in a departure from current practice, asset-allocation models would no longer need to specifically identify investment options that meet the allocation model.

The Angle

There is an argument that the SEC's reading of Rule 21F-17 is overly broad and that the rule does not go so far as to prohibit merely having confidentiality agreements that do not have express carve-outs for protected whistleblowing activity.

Lessons from the SEC's first Cypretaliation' whistleblower enforcement action

We observe that for the sample period, COSOs have market adjusted carve-out ex-date returns of 21.

An examination of the long-term results of acquired carve-out/spin-off combinations

American farmers would have been without legal recourse [at the WTO] if the EU had access to a similar carve-out," says John Murphy of the Chamber of Commerce.