1211013 Informal Interpretation

Michael Verne

– It is not a corporate entity. K Walsh concurs.





Tuesday, November 20, 2012 8:07 AM


Verne, B. Michael




Verysorry to trouble you on this REIT question, especially since I know this weekis crazy busy. Just checking in though to see if you will be able to get backto me today.

From: (Redacted)
Sent: Thursday, November 15, 2012 7:31 PM
To: 'Verne, B. Michael'
Subject: REITs


Ihope you are doing well.

Iam writing to confirm that Informal Interpretation 0501003 still reflectscurrent PNO thinking.

Specifically,we are analyzing whether the acquisition of interests of a REIT (REIT X) wouldbe HSR reportable. REIT X is organized as a trust under Maryland law (like theREIT in Informal Interpretation 0501003). Specifically, the relevant law is theMaryland REIT Law, which is Title 8 of the Maryland Corporations andAssociations Laws. The law defines a "real estate investment trust"as an "unincorporated business trust formed under [Title 8] in whichproperty is acquired, held, managed, administered, controlled, invested, ordisposed of for the benefit and profit of any person who may become a shareholder."It is distinguished from a common law "business trust."

REITX has a board of trustees and the securities that would be acquired have rightsto vote for trustees.

Wouldthe acquisition of REIT X securities by X not be HSR reportable so long as X wouldnot acquire interests in REIT X entitling it to at least 50% of the profits orassets of REIT X? Is this the case despite the fact that the definition ofnon-corporate interests states that "unincorporated entities do notinclude trusts that are irrevocable and/or in which the settlor does not retaina reversionary interest and any interest in such a trust is not a non-corporateinterest as defined by this rule."

IfREIT X does not qualify as an unincorporated entity, how should we treat it forHSR purposes?

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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