Question
From:(redacted)
Sent:Friday, March 16, 2007 10:48 AM
To:Verne, B. Michael
Subject:7A(c)(11) and 802.63
Dear Mike,
I have somequestions regarding the application of 7A(c)(11) and 802.63.
Myclient is an investment bank ("bank") that holds a 38% interest in aninsurance company that is in bankruptcy ("target"). No filing wasmade for the initial acquisition of voting securities as the value was underthe filing threshold. The bank now wishes to increase its holding toapproximately 88%, which will tip the value of its interest above the $59.8million threshold.
Accordingto the strict language of 7A(c)(11), it appears an exemption could beapplicable. However, I am not certain if 802.63 is meant to clarify the scopeof 7A(c)(11). As the bank is not an original creditor of the target, 802.63would not appear to exempt this acquisition from a filing. My questions are asfollows:
(1) Does 7A(c)(11) exempt the acquisition described from HSR filingrequirements?
(2) If 7A(c)(11) does exempt the acquisition, would thisstill be the case if the bank already owns another insurance company orcompanies?
(3) If the voting securities to be acquired carry nopresent voting rights, as the target is in bankruptcy, would the acquisition of88% of the target's securities therefore be exempt from HSR filingrequirements?
(4) If the acquisition of 88% of the "voting"securities is exempt due to the fact that the securities carry no presentvoting rights, would this still be the case if 100% of the "voting"securities were purchased, thus giving the bank in effect all of the assets ofthe target?