1206006 Informal Interpretation

Michael Verne

  – See comments. 
Change in the acquired UPE after the waiting period has expired requires no





Wednesday, June 20, 2012 12:49 PM


Verne, B. Michael


Walsh, Kathryn


HSR Question


I haveanother question for you. Company A is being acquired by Company B. Asdescribed below, I am trying to determine the ultimate parent entity of CompanyA.

FactualScenario 1

CompanyA is a family-owned LLC. Its membership interests are held 49% by Son 1, 49% bySon 2 (both adults), and 2% by the Estate of Father, who is recently deceased.The membership interests are each equally entitled to distributions of theprofits of company A and to distribution of Company A's assets upondissolution. Thus, neither Son 1 nor Son 2 currently have the right to 50% ofthe profits of company A nor 50% of the profits upon dissolution. Thus, CompanyA appears to be its own UPE.


Assumein addition that Son 1 and Son 2 are both co-executors of the Estate of Father.

Iam aware of previous guidance from the PNO that a spouse who was the personalrepresentative of the Estate of her deceased husband was not deemed to holdshares in the estate. (See File No. 9407005.)

Pleaseconfirm that Company A is still its own UPE in this scenario, as an estate is aseparate person from Son 1 and Son 2, and there is no rule stating that anexecutor of an estate is deemed to hold the shares of the Estate. (CORRECT MV)

FactualScenario 2

Assumethat, in addition to the above facts, the will of Father directs that Son 1 andSon 2 are to receive equal shares of the Estate's membership interests. It ispossible that the Estate will distribute its membership interests to Son 1 andSon 2 after the HSR filing is made, but before closing the transaction. Thisdistribution would most likely occur after the HSR waiting period has ended,but it is possible that the distribution could occur during the pendency of theHSR waiting period. Once the distribution occurs, Son 1 and Son 2 will both bea UPE of the estate due to having 50/50 interests in Company A.


IfEstate distributes its membership interests to Son 1 and Son 2 during thependency of the HSR waiting period, will Son 1 and Son 2 have to make a new HSRfiling, as the UPE of the acquired person will have changed? (NO MV)

About Informal Interpretations

Informal interpretations provide guidance from previous staff interpretations on the applicability of the HSR rules to specific fact situations. You should not rely on them as a substitute for reading the Act and the Rules themselves. These materials do not, and are not intended to, constitute legal advice.

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