0604020 Informal Interpretation

From:(redacted)

Sent:Wednesday, April 26, 2006 10:31 AM

To:Verne, B. Michael

Subject:RE: HSR Compliance

Mike,

I have a further question. For purposes of Section 16 C.F.R. 801.1(f)(1)(ii), is a real estate investment trust in which ownersreceive transferable certificates of beneficial interests a business trust withnoncorporate interests? (MV comment Yes)

---- Original Message------

From: Verne,B. Michael [mailto:MVERNE@ftc.gov]

Sent: Wednesday, April 26, 2006 8:31 AM

To:(redacted)

Subject: RE: HSR Compliance

I agree that the present trusteedoes not control the trust.

---- Original Message------

From:(redacted)

Sent: Tuesday, April 25, 2006 7:11 PM

To:Verne, B. Michael

Subject: HSR Compliance

Mike,

I was wondering if you could provide advice on thefollowing situation. A newly formed trust is the potential ultimate parententity in an acquisition that may be subject to premerger notification underthe HSR Act. The trust presently has one trustee. The Declaration of Trust doesnot give the trustee the present right to designate any other trustees. Thetrustee will, however, be required to appoint six additional trustees upon thecompletion of an initial public offering for interests in the trust (proceedsfrom the initial public offering will be used to finance the acquisition thatmay be subject to the HSR Act). But, the identity of six additional trustees isalready determined, i.e., the Declaration of Trust identifies them each byname.

My questionis whether the current trustee has the present right to designate 50% or moreof the trustees of the trust for purposes of 16 C.F.R. Section 801.1(b)(2) such that he controls the trust for HSR purposes andis its ultimate parent entity. Intuitively, it appears that the trustee doesnot meet the requirements of 16 C.F.R. Section 801.2(b)(2) both because (a) he does not have the right todesignate 50% or more of the trustees at the present time and (b) he will havea fixed obligation under the Declaration of Trust to appoint certain

predeterminedpersons as additional trustees upon the occurrence of a designated event, theinitial public offering, and he accordingly does not have the personaldiscretion to designate trustees of his own choosing.

Iwould appreciate any guidance that you may be able to provide. (MV comment Trust is its own UPE)