Question
(redacted)
Mr. Patrick Sharpe
Premerger Notification Office
Bureau of Competition
Federal Trade Commission
600 Pennsylvania Avenue, NW, Room 303
Washington, D.C. 20580
Dear Mr. Sharpe:
As I advised you in our telephone conversation the other day, (redacted) in its capacity as real estate investment advisor to corporate pension plans and government employee retirement systems (collectively Retirement Funds) desires to cause a group trust (the Trust) to be formed at this time. The Trust is being formed for the purpose of acquiring title to a shopping center (the Shopping Center) in the name of the Trust. The purchase price of the Shopping Center, which will be unencumbered by any mortgages, is in excess of $15,000,000.
The Sole beneficiaries of the Trust will be two Retirement Funds described as follows:
1. One of such Retirement Funds is a State Employees Retirement System (the Retirement System). The Retirement System will own approximately two thirds of the beneficial interest in the Trust. The Retirement System was created by the statutes of its State and most State employees are mandatorily the Retirement System. Ten of the eleven members of the Board of Trustees of the Retirement System are State Senators, Representatives and Cabinet Members. the Attorney General of that State is required to approve contracts to which the Retirement System is a party.
2. The other Retirement Fund is an existing Fund is an existing group trust (the (redacted) Trust), some of whose beneficiaries are governed by the Employees Retirement Income and Security Act. The (redacted) Fund will own the remaining approximately one-third of the beneficial interests in the Trust.
Under the terms of the agreement creating and governing the Trust, the concurrence of all beneficiaries of the Trust is required for any decision of the Trust. In other words, neither beneficiary will be able to control decisions in the event of a dispute between of Retirement System and the (redacted) Trust.
At the time of closing, the land and buildings comprising the Shopping Center will be owned by two inter-related limited partnerships and an individual who is a general partner in each of those partnerships. Neither of the Retirement Funds with beneficial interests in the Trust are related in any way to the partnerships which presently own the Shopping Center, the partners in those partnership or any of the tenants in the Shopping Center.
For the purpose of this letter, you may assume that the commerce, size of the parties and size of the transaction test under the Hart-Scott-Rodino Act has been met. However, it is my understanding form you, although neither of the beneficiaries of the Trust will have the unilateral control of the decisions of the Trust, that because the substantial majority of the beneficial interest in the Trust which is acquiring title to the Shopping Center will be owned by a State public employees retirement system, the transaction is exempt from the pre-merger notification requirements of Hart-Scott-Rodino pursuant to Section C (4) of the Clayton Act.
I would appreciate your telephoning me after your receipt of this letter to confirm verbally that my conclusions as stated in this letter are correct and that this letter will be placed in your business files.
Thank you very much.
Very truly yours,
cc: (redacted)