Question
From: (Redacted)
Sent: Monday, October 17, 2011 2:28 PM
To: Verne, B. Michael
Subject: Question about control and the identity of a foreign UPE
Hi Mike:
Founding industrialist, aforeign national, left the bulk of this estate (half a century ago) to theformation of two foreign charities (one sort of analogous to a trust, and theother probably a nonprofit corporation). The two charities own, in theaggregate, 55 percent of the voting securities of Client (Client has twoclasses of voting securities, and the charities hold the high-vote class). Thetwo charities do not control by other businesses, but do hold other investmentsecurities. Client's securities are the most significant part of the holdingsof each of the charities.
I am prepared to concludethat neither charity controls Client and thus that Client is its own UPE--except that the governing boards of the two charities are identical. Each hasits own governing board, but the members of each board overlap 100 percent.This is not because the charter documents require the boards to be the same; ithas simply been the habitual practice of those who have been engaged in themanagement of the charities. And while the governing boards are identical, themissions and charitable objects of the two charities are distinct from oneanother.
Is Client the UPE, or arethe two charities to be deemed a single UPE for HSR purposes?