July 30, 2020
Via E-Mail
William T. Hart, Esq.
Hart & Hart, LLC
1624 N. Washington St.
Denver, CO 80203
Re: Carbon Energy Corporation
Schedule 13E-3
Filed July 16, 2020
File No. 005-31849
Preliminary Proxy Statement on Schedule 14A
Filed July 16, 2020
File No. 00-02040
Dear Mr. Hart:
We have reviewed your filings and have the following comments. In some
of our
comments, we may ask you to provide us with information so we may better
understand your
disclosure.
Please respond to this letter by amending your filings, by providing
the requested
information, or by advising us when you will provide the requested response. If
you do not
believe our comments apply to your facts and circumstances or do not believe an
amendment is
appropriate, please tell us why in your response.
After reviewing any amendment to your filing and the information you
provide in
response to these comments, we may have additional comments.
Schedule 13E-3
1. We note that Mr. Bailey and Mr. Leidel and the Yorktown entities
affiliated with them
serve as directors and control approximately 66-67% of the voting power
of the
company s equity. Please advise us why Mr. Bailey, Mr. Leidel and the
Yorktown
entities have not also been identified as filing persons in the Schedule
13E-3.
2. Please note that each new filing person must individually comply with
the filing,
dissemination and disclosure requirements of Schedule 13E-3. Revise the
disclosure to
William T. Hart, Esq.
Hart & Hart, LLC
July 30, 2020
Page 2
include all of the information required by Schedule 13E-3 and its
Instructions for any
filing person added in response to the preceding comment. For example,
include a
statement as to whether each person believes the Rule 13e-3 transaction
is fair to
unaffiliated security holders and an analysis of the material factors
upon which he/she
relied in reaching such conclusion. See Item 8 of Schedule 13E-3, Item
1014 of
Regulation M-A and Question 5 of Exchange Act Release No. 34-17719
(April 13,
1981). In this regard, the reasons for the transaction and the
alternatives considered by
these affiliates may be different than those of the company, and this
fact should be
reflected in the disclosure. In addition, be sure that each new filer
signs the Schedule
13E-3.
3. Please ensure that the individual signing the Schedule 13E-3 for the
company has his title
noted in the signature page.
Preliminary Proxy Statement
4. Please revise the cover page of the proxy statement and the form of
proxy to clearly mark
each as Preliminary Copy. Refer to Rule 14a-6(e)(1).
5. Revise your proxy statement to comply with the requirements of Rule
13e-3(e). Be sure
to include a Summary Term Sheet complying with Item 1001 of Regulation
M-A and
which addresses the going private transaction as well as a Special
Factors section
immediately following the Summary Term Sheet, including Items 7, 8 and 9
of Schedule
13E-3, as applicable.
6. Please describe the background of the going private transaction.
7. Provide the information required by Item 1006(c) including whether the
company intends
to effect a forward stock split subsequent to the going private
transaction.
8. Related to comment 1 above, we note again that holders of approximately
68% of your
outstanding securities have indicated they will vote for the reverse
stock split and that if
they do so, the proposal will be approved. Please disclose this
prominently in the
summary term sheet.
9. Please clarify whether the stock split will be effected at a
recordholder level or street-
name holder level. If the former, describe in an appropriate section the
steps holders of
shares in street name may take to consolidate holdings and remain a
security holder. You
may also explain how holders may ensure that all of their holdings may
be cashed out.
William T. Hart, Esq.
Hart & Hart, LLC
July 30, 2020
Page 3
Special Factors, page 3
10. In addition to comment 5 above, please revise this section, and any
other related
disclosure in the proxy statement, to disclose separately the fairness
of the going private
transaction to holders who will be cashed out and those who will not be
cashed out.
We remind you that the filing persons are responsible for the accuracy
and adequacy of
their disclosures, notwithstanding any review, comments, action or absence of
action by the staff.
Please direct any questions to me at (202) 551-3619.
Sincerely,
/s/ Daniel F.
Duchovny
Daniel F.
Duchovny
Special Counsel
Office of Mergers
and Acquisitions