October 25, 2005
Via Facsimile ((206) 359-9000) and U.S. Mail
Michael Stansbury, Esq.
Perkins Coie LLP
1201 Third Avenue, Suite 4800
Seattle, Washington 98101
Re: Emeritus Corporation
Schedule TO-I filed October 18, 2005
SEC File No. 005-45305
Dear Mr. Stansbury:
We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your document in
response
to these comments. If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
information so we may better understand your disclosure. After
reviewing this information, we may raise additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
Offer to Purchase
Summary Term Sheet
Who owns the existing debentures?, page 1
1. Please name the two directors which represent the Saratoga
Entities on your board of directors.
Forward-Looking Statements, page 9
2. You have stated that "[t]he Private Securities Litigation
Reform
Act of 1995 provides a safe harbor from civil litigation for
forward-
looking statements accompanied by meaningful cautionary
statements."
Note that the safe harbor protections for forward-looking
statements
contained in the federal securities laws do not apply to
statements
made in connection with a tender offer. See Section 21E(b)(2)(C)
of
the Securities Exchange Act of 1934 and Regulation M-A telephone
interpretation M.2 available at www.sec.gov in the July 2001
Supplement to the Division of Corporation Finance`s Manual of
Publicly Available Telephone Interpretations. Please revise to
delete the reference and confirm that you will avoid making
reference
to that Act in all future communications in connection with the
tender offer.
Summary Consolidated Financial Data, page 10
3. We note you have incorporated by reference the financial
information required by Item 1010(a) of Regulation M-A and have
provided the summary information required by Item 1010(c). Please
provide the ratio of earnings to fixed charges and the book value
per
share information required by Item 1010(c)(4) and (5).
The Exchange Offer, page 22
4. Your ability "to terminate the exchange offer for any reason or
no
reason" renders the offer illusory. Please revise this section,
the
conditions section and throughout the document to eliminate this
right.
Release of Legal Claims by Tendering Existing Debentureholders,
page
23
5. Please note that the security holders may not contract away
their
rights under the federal securities laws. See Section 29(a) of
the
Securities Exchange Act of 1934. Please delete all references to
that effect in your offer document.
Conditions to the Offer, page 23
6. We note that the offer is conditioned upon the receipt of
necessary governmental approval. Please expand to clarify what
approvals are necessary. Currently, it is unclear what approvals,
other than qualification under the TIA which is covered by a
separate
condition, are necessary.
7. Refer to the third sentence in the second paragraph of this
section and to the last sentence of Instruction 10 to the Letter
of
Transmittal. This language suggests that once an offer condition
is
triggered, the company must decide whether or not to waive the
condition. Note that when a condition is triggered and you decide
to
proceed with the offer anyway, we believe that this constitutes a
waiver of the triggered condition(s). Depending on the
materiality
of the waived condition and the number of days remaining in the
offer, you may be required to extend the offer and recirculate new
disclosure to security holders. You may not, as this language
seems
to imply, simply fail to assert a triggered offer condition and
thus
effectively waive it without officially doing so. Please confirm
your understanding supplementally.
8. We note you have reserved the right to waive the occurrence of
any
of the conditions to the offer "at any time." Defining the
conditions as an ongoing right that may be asserted "at any time"
suggests that conditions to the offer may be raised or asserted
after
expiration of the offer. Please be advised that all conditions to
the offer, other than those subject to applicable law, must be
satisfied or waived before the expiration of the offer. Revise
the
disclosure in this section and in Instruction 10 to the Letter of
Transmittal, to make clear that all conditions, other than those
subject to government approvals, will be satisfied or waived on or
before expiration of the offer.
Material United States Federal Income Tax Considerations, page 30
9. Revise this subsection to clarify that you describe all
material
federal tax consequences of the transaction, not only the
"principal"
consequences.
10. Delete the reference to this discussion being for "general
information only" in the legend on page 30. Security holders are
entitled to rely upon the discussion.
Comparison of Terms, page 40
11. Please revise the language in the "Issue Date" paragraph under
the New Debentures section that states that you will issue the new
debentures "as soon as practicable" following the expiration of
the
offer to state that you will issue the new debentures "promptly,"
as
required by Rule 13e-4(f)(5).
Letter of Transmittal
12. We note that beginning on page 6 of the Letter of Transmittal
you
require tendering security holders to certify that they have
"reviewed" the terms of the offer. The form improperly asks
security
holders to certify that they have "reviewed" the terms of the
offer.
Please revise to delete the requirement that security holders
certify
that they have "reviewed" the offer. Alternatively, amend the
form
to include a legend in bold typeface that indicates Emeritus
Corporation does not view the certification made by security
holders
that they understand the offer materials as a waiver of liability
and
that Emeritus Corporation promises not to assert that this
provision
constitutes a waiver of liability.
Closing Comments
As appropriate, please amend your filing and respond to
these
comments within 10 business days or tell us when you will provide
us
with a response. You may wish to provide us with marked copies of
the amendment to expedite our review. Please furnish a cover
letter
with your amendment that keys your responses to our comments and
provides any requested information. Detailed cover letters
greatly
facilitate our review. Please understand that we may have
additional
comments after reviewing your amendment and responses to our
comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing includes all information required under the Securities
Exchange Act of 1934 and that they have provided all information
investors require for an informed investment decision. Since the
bidder and its management are in possession of all facts relating
to
the company`s disclosure, they are responsible for the accuracy
and
adequacy of the disclosures they have made.
In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:
* the bidder is responsible for the adequacy and accuracy of the
disclosure in the filing;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and
* the bidder may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.
Please direct any questions to me at (202) 551-3619 or, in
my
absence, to Pam Carmody, Special Counsel, at (202) 551-3265. You
may
also contact me via facsimile at (202) 772-9203. Please send all
correspondence to us at the following ZIP code: 20549-0303.
Sincerely,
Daniel F. Duchovny
Attorney-Advisor
Office of Mergers and Acquisitions
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Michael Stansbury, Esq.
Perkins Coie LLP
October 25, 2005
Page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
DIVISION OF
CORPORATION FINANCE