Rule 144 under the Securities Act of 1933 plays a significant role in the resale of restricted securities, particularly for affiliates and non-affiliates of public companies. As a "safe harbor" rule, it provides guidelines for determining whether the resale of securities is exempt from the registration requirements of the SEC, facilitating secondary market transactions.

However, the 2008 revisions to Rule 144 have introduced some changes that businesses and investors need to understand, especially regarding holding periods and the treatment of shell companies. The revisions reduced certain restrictions on the resale of restricted securities for reporting companies, but new challenges have arisen, particularly for companies that were, or still are, classified as shell companies.

Key Elements of Rule 144:

1. Non-Reporting Companies: For non-affiliates of non-reporting companies, the one-year holding period remains a requirement before the resale of restricted securities can occur.
2. Reporting Companies: Non-affiliates of reporting companies can resell restricted securities after a six-month holding period, provided the company complies with reporting obligations under the Securities Exchange Act of 1934 (Exchange Act).
3. Shell Companies: Rule 144(i) presents a unique challenge for companies that have ever been classified as a shell company. Even after a company ceases to be a shell, it must remain current on all periodic SEC filings for twelve months before Rule 144 becomes applicable.
4. Affiliates of Reporting Companies: Affiliates who wish to rely on Rule 144 must ensure the issuer has been subject to SEC reporting obligations for at least 90 days prior to sale. Additionally, volume and manner-of-sale limitations apply to affiliates even after the holding period.
5. Retroactive Application: Rule 144 can also apply retroactively, even to large companies like those listed on the NYSE or notable entities like Berkshire Hathaway.

Practical Considerations: Rule 144 is intended for public market sales and does not apply to private transactions, such as the negotiation of block sales between controlling shareholders and private buyers. Additionally, while Rule 144 provides a safe harbor, under certain circumstances, securities may be exempt from registration even if they do not comply fully with the rule.

Shell Company Complications: The SEC defines a shell company as an entity with nominal operations and assets. For companies that were once shell companies, even if they have since transitioned into active businesses, they face additional hurdles to comply with Rule 144. They must ensure their SEC filings are up to date for a full year before their securities can be freely resold under this rule.

Conclusion: The revised Rule 144 offers more flexibility for the resale of restricted securities by non-affiliates, but companies, particularly former shell companies, must navigate the updated regulations carefully. Securities attorneys play a crucial role in guiding companies through these rules to ensure compliance and facilitate lawful secondary market transactions.