Question
From: (Redacted)
Sent: Tuesday, November 20, 2012 8:07 AM
To: Verne, B. Michael
Subject: RE: REITs
Hi Mike.
Very sorry to trouble you on this REIT question, especially since I know this week is crazy busy. Just checking in though to see if you will be able to get back to me today.
From: (Redacted)
Sent: Thursday, November 15, 2012 7:31 PM
To: 'Verne, B. Michael'
Subject: REITs
Hi Mike.
I hope you are doing well.
I am writing to confirm that Informal Interpretation 0501003 still reflects current PNO thinking.
Specifically, we are analyzing whether the acquisition of interests of a REIT (REIT X) would be HSR reportable. REIT X is organized as a trust under Maryland law (like the REIT in Informal Interpretation 0501003). Specifically, the relevant law is the Maryland REIT Law, which is Title 8 of the Maryland Corporations and Associations Laws. The law defines a "real estate investment trust" as an "unincorporated business trust formed under [Title 8] in which property is acquired, held, managed, administered, controlled, invested, or disposed of for the benefit and profit of any person who may become a shareholder." It is distinguished from a common law "business trust."
REIT X has a board of trustees and the securities that would be acquired have rights to vote for trustees.
Would the acquisition of REIT X securities by X not be HSR reportable so long as X would not acquire interests in REIT X entitling it to at least 50% of the profits or assets of REIT X? Is this the case despite the fact that the definition of non-corporate interests states that "unincorporated entities do not include trusts that are irrevocable and/or in which the settlor does not retain a reversionary interest and any interest in such a trust is not a non-corporate interest as defined by this rule."
If REIT X does not qualify as an unincorporated entity, how should we treat it for HSR purposes?