1211012 Informal Interpretation

Michael Verne

– Agree. K Walsh concurs.


From: (Redacted)
Sent: Monday, November 19, 2012 8:04 PM
To: Verne, B. Michael
Subject: HSR Question regarding Trusts


Wehave a quick trust control question where we are trying to confirm as soon aspossible that an HSR filing is not needed.

Ahusband and his wife set up an irrevocable trust for their child ("TrustA"). The child is an adult, and is the beneficiary and trustee of Trust A.As trustee, please assume for purposes of this hypothetical that the child hasthe power under the trust document to appoint and remove 50% or more of thetrustees.

Thechild has provided the child's father with a broad and sweeping statutorydurable power of attorney. The power of attorney is revocable. Please assumethat the power of attorney provides the father with the power to exercise hischild's rights in the trust, including the appointment and removal of 50% ormore of the trustees.

Pleaseconfirm my understanding that where a person may appoint and remove 50% or moreof the trustees of an irrevocable trust based solely on a revocable power ofattorney, the power of attorney would not shift control over the trust awayfrom the person who grants and can revoke the power of attorney. In otherwords, since the power of attorney is revocable, our view is that the childretains control over Trust A, even if the father could temporarily appoint andrevoke 50% or more of the trustees while the proxy is in place.

Thisconclusion is correct in our view by analogy to other well established HSRtreatment of revocable positions that get disregarded for HSR control purposes.For instance, revocable proxies for voting securities do not count toward theperson receiving the proxy as having control over an issuer. Similarly, when atrust is revocable, the corpus of the trust is deemed to be the holdings of thesettlor of the trust.

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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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