Skip to main content
Date
Rule
801.10
Staff
Michael Verne
Response/Comments
The Board can delegate the role of determining the fair market value to any one they want. There is no requirement that the Board take any formal action to approve the determination, but they are ultimately responsible for it.

Question

From: (redacted)

Sent: Tuesday, July 11, 2006 6:12 PM

To: Verne,B. Michael

Cc: Ovuka,Nancy M.

Subject: HSRQuestion

Section 801.10(c)(3) of the HSRRegulations provides that "fair market value" is to be determined ingood faith by the board of directors of the ultimate parent entity includedwithin the acquiring person; or by an entity delegated that function by suchboard.

What is intended by the reference to an "entitydelegated....", i.e., who can the board delegate such role to? Can theydelegate that role to the CFO? Must the board ultimately approve the specificvaluation ascribed by the delegated entity or is it sufficient if it merelydelegates the duty and have that delegate report back to the officers of thecorporation?

Ifyou could let me know how that provision has been interpreted, it would be veryhelpful. Thanks.

About Informal Interpretations

Informal interpretations provide guidance from previous staff interpretations on the applicability of the HSR rules to specific fact situations. You should not rely on them as a substitute for reading the Act and the Rules themselves. These materials do not, and are not intended to, constitute legal advice.

Learn more about Informal Interpretations.

Return to top