1206005 Informal Interpretation

Michael Verne

  – Protector is
UPE.  K Walsh concurs.
I've run
into trust protectors before, but not where the settlor can remove and
replace the protector and the protector can remove and replace the trustee. I
think reading the language of the control rule literally you have to come to
the conclusion that the protector controls the trust because it is the only
person that can remove and replace the trustee, although arguably the settlor
indirectly has that right. UPDATE Sept. 2014: This no longer accurately represents the position of the PNO. Please see informal interpretations 1301002 and 1402002.





Monday, June 18, 2012 3:35 PM


Verne, B. Michael; Walsh, Kathryn




HSR Inquiry: UPE

DearMr. Verne and Ms. Walsh:

Iam writing to ask for your direction on the identification of the UPE to file onbehalf of the seller of voting securities on the HSR notification and report.

Approximately47% of the voting securities are held in an irrevocable trust (the "IrrevocableTrust"). The Irrevocable Trust names the settlor's sister as the soletrustee, but also names a "Trust Protector', who has the power toreplace the trustee. Then, the settlor, during his life, retains the power toreplace/appoint the Trust Protector. The settlor of the Irrevocable Trust doesnot retain any other residual interest or power in the trust corpus.

Thesettlor of the Irrevocable Trust also holds approximately 3% ownership interestin the company under his revocable trust. Thus, in combination with the 47%Irrevocable Trust, the settlor -if his power to appoint a successor TrustProtector (who cannot be himself) is deemed controlling -could be the UPE forHSR filing purposes.

Alternatively,the Trust Protector also holds a separate approximate 5% ownership interest inthe company in his revocable trust. Thus, in combination with the 47%Irrevocable Trust, the Trust Protector could be the UPE for HSR filingpurposes.

WhileI have reviewed Sec. 801.1(b) and 801.1(c)(3) and (4), I remain unsure as towhich person is the proper filer (again on behalf of the seller). I would appreciateyour guidance as to which person -the settlor, or the Trust Protector should bethe UPE for this filing.

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