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Date

Tags:

Rule
Voting Trust; 802.9
Staff
Nora Whitehead
Response/Comments

This Voting Trust is its own UPE. The Voting Trust cannot rely on 802.9 because of the Trustee’s role as a director of Buyer.

Question

From: Whitehead, Nora
Sent: Tuesday, November 08, 2016 1:55 PM
To: [REDACTED]
Cc: Walsh, Kathryn E.; Berg, Karen E.; Gillis, Diana L.; Carson, Timothy; Shaffer, Kristin
Subject: RE: Voting Trust/ Interps 1503001/1406014

Agree with both your points.

Nora Whitehead

(202) 326-3262

From: [REDACTED]
Sent: Monday, November 07, 2016 11:25 AM
To: Walsh, Kathryn E.; Gillis, Diana L.; Berg, Karen E.; Whitehead, Nora; Carson, Timothy; Shaffer, Kristin
Subject: Voting Trust/ Interps 1503001/1406014

Dear All:

I have a transaction in which about 20 Family Trusts, most of which are their own UPE, transferred legal title of their shares in Corporation X to a voting trust. In exchange each shareholder received a voting trust certificate. Mr. A, the founder of Corporation X is the sole trustee.

The Voting Trust is irrevocable although it may be amended by agreement of the trustee  and a majority of the certificate holders of the Voting Trust.

In this transaction, Corporation X is being sold in exchange for cash and voting securities of the Buyer. Although the Voting Trust will hold less than 5% of Buyer as a result of the transaction, I believe that it is not able to rely on the investment intent exemption as Mr. A will serve as a Director of the Buyer, post transaction.

First, am I correct, in light of the interpretations cited above, that the Voting Trust is its own UPE?

Second, am I correct that the Voting Trust will have to submit a filing as the Trustee’s role as a director precludes the Trust’s reliance on investment intent?

Thank you.

[REDACTED]

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