From: St. Louis, Janelle [jstlouis@centerpoint-prop.com]
Sent: Wednesday, August 21, 2002 5:35 PM
To: rule-comments@sec.gov
Subject: S7-22-02

August 21, 2002

 

Mr. Jonathan G. Katz
Secretary
U.S. Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549-0609

Re:  File No. S7-22-02

Dear Mr. Katz:

Over the last several months the SEC has proposed a number of rule 
changes to enhance the clarity and public confidence in the public 
securities markets.  We at CenterPoint and myself personally strongly 
endorse 99.9% of what the SEC has proposed thus far and think it will 
be effective.  However in the case of S7-22-02 we think a serious 
mistake is about to be made.

Indeed should this rule change occur it will be the mother load of 
unintended consequences.

My company enters into thousands of letters of intent every year.  By 
their very nature these are non-binding (if they were binding they would 
no longer be letters of intent but in fact contracts).  We estimate that 
less than 25% of the letters of intent that we enter into result in 
finalized transactions.  Any number of reasons causes these intended 
deals to fail and new reasons for failure are discovered every day.

If letters of intent were to be disclosed to the public we feel that it 
would mislead the public as to the probability and viability of the 
publicized transaction.

Moreover, any number of more Machiavellian scenarios could be contemplated.  
Letters of intent could be announced to inflate share prices; letters of 
intent could be announced to mislead competitors; letters of intent could 
be announced to mislead regulators, etc. etc. etc.

S7-22-02 is a Pandora’s Box.  Please don’t open it.

Sincerely,

John S. Gates, Jr.
Co-Chairman and CEO CenterPoint Properties Trust