0911005 Informal Interpretation

Date

November 4, 2009

Rule

802.30

Staff

Michael Verne

Response/Comments

event because there is no acquiring person in the A-H transaction. However, I'm having difficulty fitting one piece of this into the intra person exemption. Let's walk through the steps: 1) A becomes the sale member of H in place of S (non-reportable as stated above). - At this point S has no interest in H because A can designate all of its directors as sale member, so the structure is now: H is its own UPE and S is its own UPE and the sale member of F 2) H becomes the sale member of S. - This is the step I'm having trouble with. In this transaction H is the acquiring person and S is the acquired person (each its own UPE), so the acquiring and acquired persons are not the same person by reason of 801.1 (b )(2). I don't see how 802.30 can exempt this step. So now the structure looks like this: H is its own UPE and the sale member of S, which is the sale member of F 3) H becomes the sale member of F. - This would be exempt under 802.30 because H is both the acquiring and acquired person (i.e., it controls F both before and after this step).

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Question

From:

(Redacted)

Sent:

Wednesday, November 04, 2009 9:53 AM

To:

Verne, B. Michael

Subject: CoverageQuestion

Michael,

I have been askedto confirm with the PNO that the following transaction would be considered anintraperson transaction (if not otherwise exempt) and therefore not reportable.

H is a nonprofithospital, the sole member of which is S. S is also a nonprofit corporation, butwithout members. S is also the sole corporate member of F, a charitablefoundation.

In the proposedtransaction, H will amend its governing documents to name A, as its sole memberin place of S. For purposes of this inquiry, you may assume that A is an agencyof state government and that, this portion of the transaction would bedefinitionally exempt under Section 801.1.

Also in theproposed transaction, S and F will amend their governing documents to name H(now controlled by A) as their respective sole members. We would like toconfirm that the "flip" of the relationship between S and H, and thesubstitution of H for S as the member of F, (to the extent not also exemptunder 801.1) would be considered an intraperson transaction exempt underSection 802.30 of the Rules, notwithstanding the change of control of H.

0911005 Informal Interpretation

Question

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