0503005 Informal Interpretation

From: (redacted)

Sent: Wednesday, March 02, 2005 1:31 PM

To: Verne, B. Michael

Subject: Valuationunder new rules

Mike - I assumethat the 801.10 valuation rules for an LLC will treat it comparably to acorporation with respect to liabilities. That is, if Acquiror intends to buy100 of the LLC interests for $40 million and that acquisition price isdetermined, that's the end of the valuation analysis. It does not matter thatthe LLC has $30 million in liabilities, b/c you do not need to add those to theacquisition price. E..g. ABA Interp. 97 - dealing with liabilities inthe context of acquisitions of voting securities.

(FYI - I knowthat 100% is no longer a magic number, but I use that just because that's thesituation I am analyzing).

Congratulationson getting the Non-corporate entities rules out. Do you know when they will bepublished in the Federal Register?