0812004 Informal Interpretation

From

(redacted)

Sent:

Tuesday, December 09, 2008 1:03 PM

To:

Verne, B. Michael

Subject:

HSR Question --Bankruptcy Proceeding/Time Sensitive

Mike -

I am writing toconfirm that the following transaction relating to the emergence of a firm frombankruptcy will not satisfy the size of transaction test and therefore will notbe reportable under HSR.

Company A isreorganizing in bankruptcy. Pursuant to the reorganization, Company B ispurchasing 50% of what will be all of the newly issued and outstanding commonstock of the reorganized Company A for $44 million. Company B is alsopurchasing newly issued "Convertible Debt" from the reorganizedcompany for $85 million. The new convertible debt does not have any currentvoting rights, but may be converted to new common stock. Company A will have noother class of outstanding voting securities upon its emergence from bankruptcy

It is ourunderstanding that Company B's acquisition of 50% of the new common stock willnot be a reportable transaction because it will not meet the size oftransaction test Since the convertible debt being acquired does not carry anypresent voting rights, its acquisition should be exempt pursuant to Section802.31. See also 16 C.F.R. 801.1 (f)(3) (acquisition of convertible debentureswith no present voting rights exempt under 802.31), Therefore, the value of thedebt should not be aggregated with the determined purchase price of the newcommon stock which, at $44 million, falls below the current $63.1 million sizeof transaction reporting threshold. Should any of the debt be converted at somefuture time into voting securities with a current right to vote for directors,the conversion will be examined at that point to determine whether it triggersan HSR filing obligation.

I would appreciateyour advising me whether you agree with the foregoing analysis.