2501011 Informal Interpretation

Date

January 23, 2025

Rule

801.1

Staff

Kristin Shaffer

Response/Comments

Since A continues to hold 50% or more of the voting securities of S, it is the UPE.

Original Image - 2501011 Informal Interpretation (475.84 KB)

Question

From: Shaffer, Kristin
Sent: Thursday, January 23, 2025 10:39:21 AM (UTC-05:00) Eastern Time (US & Canada)
To: [Redacted]
Cc: HSRHelp
Subject: RE: UPE

Since A continues to hold 50% or more of the voting securities of S, it is the UPE.

Best regards,
Kristin

From: [Redacted]
Sent: Tuesday, January 21, 2025 1:22:02 PM (UTC-05:00) Eastern Time (US & Canada)
To: HSRHelp
Subject: UPE

Dear Sir/Madam:
I have a client, S Inc., that used to have 6 corporate shareholders, with no one shareholder owning more than 25%. At that time, S, Inc. would be considered its own UPE. Three of the shareholders merged and thus S, Inc. now has 3 shareholders, A, B and C. Post its merger, A owns 60+% of the common shares of S, Inc.
Because it was never the intent of the shareholders that any one truly control S, Inc., they revised the by-laws to reflect that only a simple majority of the Board is required for many actions, but a super majority (70%) is required for:
(1) Any change, modification or amendment to S, Inc.’s Articles of Incorporation, Bylaws or Shareholder Agreement;
(2) The merger or consolidation of S, Inc.;
(3) The division of S, Inc. into two or more companies;
(4) The voluntary dissolution S, Inc.;
(5) The sale, lease, exchange or other disposition of more than 50% of the assets of S, Inc.;
(6) Any joint venture with any other business(es) or entity(ies) where S, Inc. would have 50% or less of the voting control in such joint venture;
(7) The acquisition by S, Inc. of all or substantially all of the assets of another business or entity; and
(8) Hiring, evaluation, and discharge of the President and Chief Executive Officer.
Under these circumstances, who would be the UPE of S, Inc.? S, Inc. or A?

Many thanks.

Sheinberg, Samuel I.
Fro m: 	HSRH elp
Sent: 	Thursday, Janu ary 23, 20 25 10:39 AM
To: 	HSR Auto Forwa rd Li st
Subject: 	FW: UPE
From: Shaffer, Kri stin
Se nt : Thursday, Janua ry 23 , 2025 10:39:21 AM ( UTC-05 : 00 ) Eastern nme ( US & Canada )
To:
Cc: HSRHe lp
Subj ect : RE: UPE
Since A continues to hold 50% or mo re of the voting securiti es of S, it is the UPE.
Best regards,
Kr istin
Krist in Shaff er
Attorney
Premerger Not ifi cat ion Office
Federal Trade Commiss ion
202- 326-2 388 I kshaffer@ftc.gov
From:-
Se nt: Tuesda y, January 21 , 2025 1:22:02 PM (UTC-05:00) Eastern Time ( US & Canada )
To: HSR Help
Subject: UPE
Dea r Sir/ Madam:
I ha ve a client, S Inc., that used to have 6 corporate shareholders, w ith no one shareholder owning more than 25 %. At
that time , S, Inc. wou ld be considered its own UPE. Three of the shareholders merged and thus S, Inc. now has 3
shareholders, A, Band C. Post its merger, A ow ns 60+% of the common shares of S, Inc.
Because it w as never the i ntent of the shareholders that any one tru ly control S, Inc., they revised the by-laws to reflect
that only a simple major it y of the Board is required fo r many actions, but a super majorit y (70 %) is required for :
(1) Any change, modification o r amendment to S, lnc .' s Art i cl es of Incorpor at ion, Bylaws or Sha reholder Ag reement;
(2) The merger or consolidation of S, Inc.;
(3) The division of S, Inc. i nto t wo or more companies;
(4) The voluntary dissolution S, Inc.;
(5) The sa le, lease, exchange or other disposition of more than 50% of the assets of S, Inc.;
(6) An y jo i nt venture w ith any other business(es ) or entit y( ies) where S, Inc. w ould have 50% or less of the v ot ing control
in such jo i nt venture;
(7) The acquisition by S, Inc. of a ll or su bstantially all of the assets of another business or entity; and
(8) Hir ing, evaluation, and discharge of the Pres ident and Ch i ef Executive Offi ce r.
Under these ci rcumstances, w ho wou ld be the UPE of S, Inc.? S, Inc. or A?
Man y thanks.
1

2501011 Informal Interpretation

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