2203001 Informal Interpretation

Sheinberg, Samuel I.
From: 	HS RH elp
Sent: 	Thursday, March 31, 2022 1:45 PM
To: 	Wa lsh, Kat h ry n E.; Be r g, Karen E.; Musick, Vessel in a; Sheinberg, Samue l I. ; Six, Anne; Whitehead, No ra
Subject: 	FW: [EXT ERNA L] RE: Di lut ion/ Beneficial Ownership
From: Sh affer, Kristin < ksh affer@ftc.gov>
Sent: Thursday, March 31 , 2022 1:44:53 PM (UTC-05:00) Easte rn Time (US & Canada)
To:
Cc:
SubJe
■ ,
In the context of a reorganization, the exempt ion only app li es so long as no new ass et s are involved, regardles s of
whether they are exempt . Cash ha s been the only exception to that pr in ci ple.
Best regard s,
Kristin
From :
Sent: Thursda y, March 31 , 2022 12:43 PM
To: Shaffer, Kristin <kshaffer@ftc .gov>; HSRHe lp <HSRHe lp@ftc.gov>
Cc:
Subject: RE : [EXTERN AL] RE : Di lution/ Benefi ci al Ownership
Dear Kr ist in:
Thank you for y our consideration of the matter . Any further explanation po ssible?
If not, thank you.
Best regard s,
From: Sha ffe r, Krist in <kshaffer@ftc.gov>
Date: Thu rsd ay, Mar 31, 2022, 12:36 PM
To:
Cc:
Subject: [EXTERN AL] RE : Dilut ion/ Benefi ci al Ownership
We disagree. The exemptions do not apply t o the se facts.
•Best regard s,
Kristin
Kristin Shaffer
Attorney
Pr emerger Noti fi cation O ffice
Federal Trade Commission
202-32 -
From :
Sent: Wednesda y, March 30, 2022 4:08 PM
To: HSRHe lp < HSRHelp @ftc .gov>
Cc:
Subject: Dil ut ion/ Beneficial Ow nership
Dear All :
I ha ve a transaction w hich, analyt i ca ll y is the same as a reorganization but which does not fit w ith in the parameters of
Ru le 802.10 .
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A now holds a 30% LLC interest in LLC-1, an entity that provides investment management services to entities affiliated
with Parent, and is 70% owned by Parent, now a REIT, although it will cease to be a REIT in the future. In the
contemplated transaction, A will be swapping its 30% interest in LLC-1 for a 10% interest in Parent plus cash. LLC-1 holds
the majority of the assets of Parent. Parent owns some assets outside of LLC-1, but all of those assets are exempt assets
(cash, minority non-corporate interests, minority stock interests in third parties, debt investments, and funds that hold
minority stock interests of third parties.) The only non-exempt assets held by Parent stem from its 70% (to be 100%)
ownership of LLC-1. Thus, through this transaction, A’s interest in the non-exempt management business effectively is
being reduced from 30% to 10%. Parent does own additional assets and interests but all of these additional assets and
interests, while having economic value, fall under an HSR exemption.
Given these facts, A’s beneficial ownership of the only non-exempt assets held by Parent is not increasing but, in fact, is
being reduced from 30% to 10% and the swap of interests is, therefore, exempt from the filing requirements of the HSR
Act.
Please let me know your views.
Best regards,
**This is an external message from: kshaffer@ftc.gov **
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