Question
[redacted]
October 17, 2000
By Hand
Mr. Michael Verne
Premerger Notification Office
Bureau of Competition, Room 303
Federal Trade Commission
6th Street & Pennsylvania Avenue, N.W.
Washington, D.C. 20580
Dear Mr. Verne:
This correspondence is to confirm the recent telephone conference which of the (redacted ) law firm and I had with you concerning the status of a mortgage company for purposes of the exemptions set forth in 15 USC 19=8a(c)(2) (concerning acquisitions of bonds, mortgages, deed of trust or other obligations which are not voting securities) and 16 CFR 802.4.
As explained, "Company A" is acquiring "Company B" which is primarily engaged in the construction of residential homes (the "Acquisition"). Company B owns 100 percent of a mortgage company subsidiary ("Company C"). Company A's acquisition of Company B will be exempt under 16 CFR, 802.2(d) and 802.4. The purpose of the call to you was to determine whether Company C are (i) "fee receivable" (relating to application and similar fees charged by Company C to its customers), (ii) "mortgages receivable warehouse" (mortgages which have been made by Company C and are held in inventory until they can be sold to third parties), and (iii) "intercompany" assets of office furniture and fixtures, computer equipment, prepaid expenses, prepaid commissions, prepaid insurance, loans fees, and mortgage receivables.
Based on your comments, we understand that sine each of the assets either consist of mortgages or have a direct nexus to Company C's mortgage lending business, they can all be treated as assets falling within the exemption set forth in 18 U.S.C. 18a(c)(2), with the result that Company A's indirect acquisition of all of Company C's voting securities is exempt under 16 CFR 802.4.
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If you or your colleagues should disagree with the conclusion expressed herein, please contact me at [redacted] as soon as possible.
Thank you for your assistance in connection with this matter.
Sincerely,
[redacted]