Question
From: (redacted
Sent: Tuesday, November 08, 2005 10:52 AM
To: Verne,B. Michael
Subject: RE: Our discussionyesterday
Mike: When youget a chance, could you shoot me a response to the question in the e-mailbelow?
And I haveanother, more technical one, relating to Item 2(c)(iii) on the Form. I ampreparing a filing for formation of an LLC in which two parties will each contributeassets, and one of the parties will take back a majority entitlement to the LLC'sprofits. We talked about this one last week. Because the assets beingcontributed by one of the parties are not organized as an entity, we agreedthat the filing would be an 801.50 formation, not an 801.2(d) consolidation.The contributor getting the majority interest will file, and nobody else files.Here's my question. The agreed value of the non-corporate interest that themajority contributor will acquire is $83 million. The agreed value of theassets being contributed by the minority contributor is $60 million. The filingfee is based on the $83 million (which is the size-of-transaction). But what isthe value of the assets that will be held as a result of the formation (i.e.,the response to 2(c)(iii) (MV comment should be 2(d)(iv)) ? Isit $60 million (because the $83 million is exempt intra-person), or is it $143million (combining value of the two contributions)?
From: (redacted)
Sent: Friday,November 04, 2005 9:01 AM
To: Verne,B. Michael
Subject: Our discussionyesterday
Yesterday wetalked about the fact that a voting rights agreement that confers on somebodythe power to vote half or more of the outstanding shares of a corporation wouldbe a "contractual power to designate half or more of the directors"and would therefore confer control of the corporation on the person having thatvoting power.
HSR counsel on the other side of a dealpointed out Interpretation 46 in the ABA book,which suggests that if the voting rights agreement is revocable, it wouldn't beviewed as conferring control. In my experience, any contractual arrangement isrevocable unless it says it isn't, and 1 take the point that a nominallyrevocable arrangement that imposes adverse consequences on a revocation mayraise a separate issue. So how do I deal with an agreement that confersmajority voting rights and doesn't say anything at all about revocability?
Fun, isn't it?