Question
From: (redacted)
Sent: Friday, December 20, 2002 2:56 PM
To: Michael Verne
Subject: Rule 802.30 & Bankruptcy
Michael Verne
Would you please confirm my understanding of the application of the HSR Rules in the following situation.
Corporation A owns Subsidiary 1 (S1). A also owns Subsidiary 2 (S2). S1 owns Sub-Subsidiary 1 (SS1). A intends to cause S1 to sell the stock of SS1 to S2 in a transaction that ordinarily would be exempt from notification under Rule 802:30 (intraperson transactions). However, prior to effecting the transaction, A may have to place S1 into Chapter 11 bankruptcy. In bankruptcy, S1 will be a debtor in possession, still controlled by A, and no trustee will be appointed. It is my understanding, although I can find no rule on the subject, that a debtor in possession is considered to be its own UPE. 1 can find no interpretation or rule indicating that the fact that a debtor in possession may be its own UPE would somehow deprive the debtor's controlling parent of the benefit of the Rule 802.30 exemption.
Accordingly, it is my understanding that, under the above facts, A would be entitled to rely on the exemption in Rule 802.30 to complete the transaction above-described.
Would you please confirm at your earliest convenience that my understanding as above-stated is in accordance with the views of the PNO.