Sunwest Rollover Member LLC; Notice of Application, 20442-20445 [2012-8061]
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20442
Federal Register / Vol. 77, No. 65 / Wednesday, April 4, 2012 / Notices
For the Nuclear Regulatory Commission.
Jennie Rankin,
Project Manager, Licensing Branch, Division
of Spent Fuel Storage and Transportation,
Office of Nuclear Material Safety and
Safeguards.
[FR Doc. 2012–8111 Filed 4–3–12; 8:45 am]
BILLING CODE 7590–01–P
OCCUPATIONAL SAFETY AND
HEALTH REVIEW COMMISSION
Proposed Information Collection;
Comment Request
Occupational Safety and Health
Review Commission.
ACTION: Notice.
AGENCY:
The Occupational Safety and
Health Review Commission (OSHRC)
invites the public and other Federal
agencies to comment on a proposed
information collection concerning
participation in conventional
proceedings as part of our review of the
OSHRC Settlement Part program.
OSHRC will submit the proposed
information collection request to the
Office of Management and Budget
(OMB) for review, as required by the
Paperwork Reduction Act of 1995 (PRA)
(44 U.S.C. 3501 et seq.).
DATES: Written comments must be
submitted on or before June 4, 2012.
ADDRESSES: Submit all written
comments, identified by the title
‘‘Paperwork Reduction Act Information
Collection—Conventional Proceedings’’,
by mail or hand delivery to John X.
Cerveny, Deputy Executive Secretary,
Occupational Safety and Health Review
Commission, 1120 20th Street NW.,
Washington, DC 20036–3457, by fax to
202–606–5050, or by email to
pracomments@oshrc.gov.
SUMMARY:
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FOR FURTHER INFORMATION CONTACT:
Requests for information or copies of the
proposed information collection
instrument should be directed to John
X. Cerveny, Deputy Executive Secretary,
Occupational Safety and Health Review
Commission, 1120 20th Street NW.,
Ninth Floor, Washington, DC 20036–
3457; Telephone (202) 606–5706; email
address: pracomments@oshrc.gov.
SUPPLEMENTARY INFORMATION: OSHRC’s
Settlement Part program, codified at 29
CFR 2200.120, is designed to encourage
settlements on contested citations
issued by the U.S. Department of
Labor’s Occupational Safety and Health
Administration (OSHA) and to reduce
litigation costs. The program requires
employers who receive job safety or
health citations that include proposed
penalties of $100,000 or more in total to
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participate in formal settlement talks
presided over by an OSHRC
Administrative Law Judge. If settlement
efforts fail, the case would continue
under OSHRC’s conventional
proceedings, usually before a judge
other than the one who presided over
the settlement proceedings.
OSHRC has submitted for OMB
review a proposed information
collection from participants in the
Settlement Part program. A copy of that
information collection request (ICR)
with applicable supporting
documentation may be obtained from
the RegInfo.gov Web site, https://
www.reginfo.gov/public/do/PRAMain,
or by contacting John X. Cerveny,
Deputy Executive Secretary,
Occupational Safety and Health Review
Commission, 1120 20th Street NW.,
Ninth Floor, Washington, DC 20036–
3457; Telephone (202) 606–5706; email
address: pracomments@oshrc.gov.
OSHRC proposes to conduct a second
voluntary survey of employer,
Department of Labor (OSHA) personnel
(decision makers), Authorized
Employee Representatives, and their
representatives, including attorneys,
who personally participated in OSHRC
cases between February 15, 2011 and
June 30, 2012, where a total proposed
penalty between $50,000 and $99,999
was involved and where OSHRC
Settlement Part Process procedures were
not used. The cases would include those
settled by the parties without an OSHRC
judge conducting a face-to-face
settlement proceeding, as well as any
cases within the above dollar range that
went to a trial on the merits. These cases
would be considered part of a control
group. Participant responses will be
used for comparative purposes and to
facilitate our understanding of the
efficacy of the Settlement Part program.
The proposed information collection
instrument is a written survey
consisting of a series of questions to
determine participants’ level of
satisfaction with OSHRC processes and
outcomes. They are intended to take a
respondent no more than 30 minutes to
complete. The respondents may skip
any questions that they do not feel
comfortable answering, and are
permitted to comment further on their
experiences at the end of the
questionnaire.
OSHRC will submit the proposed
information collection to the Office of
Management and Budget for review, as
required by the Paperwork Reduction
Act of 1995 (44 U.S.C. 3501 et seq.).
OSHRC invites comments on: (1)
Whether the proposed collection of
information is necessary for the proper
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performance of the agency’s functions,
including whether the information will
have practical utility; (2) the accuracy of
the agency’s estimate of the burden of
the proposed collection of information,
including the validity of the
methodology and assumptions used; (3)
ways to enhance the quality, utility, and
clarity of the information to be
collected; and (4) ways to minimize the
burden of the information collection on
respondents, including through the use
of automated collection techniques,
when appropriate, and other forms of
information technology. Comments
submitted in response to this notice will
be summarized and included in the
request for OMB approval of this
information collection; they also will
become a matter of public record.
OMB Control Number: Not applicable,
new request.
Form Number: Not applicable.
Type of Review: Regular submission
(new information collection).
Title: Survey of Participants in
OSHRC Conventional Proceedings
where between $50,000 and $99,999 is
at issue.
Description: Information collection
required to evaluate the Review
Commission’s Settlement Part process.
Affected Public: Employer and
Department of Labor (OSHA) personnel
(decision makers), Authorized
Employee Representatives, and their
representatives, including attorneys,
who have personally participated in
OSHRC cases between February 15,
2011 and June 30, 2012, where a total
proposed penalty between $50,000 and
$99,999 was involved and where
OSHRC Settlement Part Process
procedures were not used.
Estimated Number of Respondents:
500.
Estimated Time per Response: 30
minutes.
Estimated Total Reporting Burden:
250 hours.
Obligation To Respond: Voluntary.
Dated: March 30, 2012.
Debra Hall,
Acting Executive Director.
[FR Doc. 2012–8124 Filed 4–3–12; 8:45 am]
BILLING CODE 7600–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
30014; File No. 812–13778]
Sunwest Rollover Member LLC; Notice
of Application
March 29, 2012.
Securities and Exchange
Commission (‘‘Commission’’).
AGENCY:
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Federal Register / Vol. 77, No. 65 / Wednesday, April 4, 2012 / Notices
Notice of an application for
exemption under the Investment
Company Act of 1940 (the ‘‘Act’’).
Applicant’s Representations
Jill
Ehrlich, Senior Counsel, at (202) 551–
6819, or Mary Kay Frech, Branch Chief,
at (202) 551–6821 (Division of
Investment Management, Office of
Investment Company Regulation).
Interests consist of common interests and class A
preferred units, each as defined in the limited
liability company agreement governing Blackstone
LLC (‘‘Blackstone LLC Agreement’’).
2 Applicant’s limited liability company agreement
requires that two of the three members of the Board
of Managers are not ‘‘interested persons’’ as defined
in the Act.
3 The acquisition of the Sunwest Assets by
Blackstone LLC is referred to herein as the
‘‘Blackstone Acquisition.’’ The Blackstone
Acquisition is governed by the terms and
conditions of an Agreement of Purchase, Sale and
Contribution dated as of January 15, 2010, and
amended on February 12, 2010, March 25, 2010 and
July 13, 2010 (‘‘PSA’’).
4 The TIC Investors and the LLC Investors are
referred to herein, collectively, as ‘‘Sunwest
Investors.’’
ACTION:
1. Applicant is a Delaware limited
liability company formed for the
purpose of holding equity interests
SUMMARY: Summary of Application:
(‘‘Rollover Equity Interests’’) in BRE/SW
Sunwest Rollover Member LLC
Portfolio LLC (‘‘Blackstone LLC’’),1 a
(‘‘Applicant’’) requests an order of the
Delaware limited liability company, to
Commission pursuant to sections 6(c)
resolve the bankruptcy of Sunwest (as
and 6(e) of the Act exempting it from all
defined below). Applicant is managed
provisions of the Act and the rules
by a three-person board of managers
thereunder, except sections 9, 17(a),
(‘‘Board of Managers’’) elected by the
17(d) and 17(e), section 31, as modified
members of Applicant.2 Although
herein (‘‘Modified Section 31’’), and
Applicant is authorized to exist until
sections 36 through 53 of the Act and
December 31, 2020, Applicant expects
the rules thereunder. Applicant would
that Blackstone LLC will have a limited
be exempt until the earlier of August 5,
life of up to five years from its
2015 or such time as it no longer meets
acquisition of the Sunwest Assets (as
the definition of an investment
defined below) and similarly also
company under the Act.
expects to liquidate and dissolve by
DATES: Filing Dates: The application was August 5, 2015.
filed on May 28, 2010, and amended on
2. Blackstone LLC was formed to
June 17, 2010, June 28, 2010, July 8,
acquire substantially all of the core
2010, October 8, 2010, February 22,
assets (consisting of more than 140
2011, September 6, 2011, and March 22, senior living facilities throughout the
2012.
United States) (collectively, the
Hearing or Notification of Hearing: An ‘‘Sunwest Assets’’) of ‘‘Sunwest,’’ a
group of related entities formerly
order granting the application will be
involved in the acquisition,
issued unless the Commission orders a
hearing. Interested persons may request development, design, construction,
financing, insuring and operation of
a hearing by writing to the
senior living and other properties
Commission’s Secretary and serving
nationwide, along with miscellaneous
applicant with a copy of the request,
other related assets and operations.3
personally or by mail. Hearing requests
3. Prior to 2008, Sunwest operated
should be received by the Commission
290 facilities and was one of the largest
by 5:30 p.m. on April 23, 2012 and
assisted living providers in the United
should be accompanied by proof of
States. Sunwest financed the acquisition
service on applicant, in the form of an
and development of its senior living and
affidavit or, for lawyers, a certificate of
other properties through various means,
service. Hearing requests should state
including the sale to investors of tenantthe nature of the writer’s interest, the
in-common interests (‘‘TIC Investors’’)
reasons for the request, and the issues
and limited liability company interests
contested. Persons who wish to be
(‘‘LLC Investors’’) in properties owned
notified of a hearing may request
by Sunwest.4 On December 1, 2008,
notification by writing to the
Stayton SW Assisted Living, L.L.C., one
Commission’s Secretary.
of the Sunwest entities (‘‘Debtor’’),
ADDRESSES: Elizabeth M. Murphy,
initiated its bankruptcy case
Secretary, U.S. Securities and Exchange (‘‘Bankruptcy Case’’) with the filing of a
Commission, 100 F Street NE.,
voluntary petition under Chapter 11 of
Washington, DC 20549–1090.
Title 11 of the United States Code.
Applicant, 2300 SW First Avenue, Suite
200, Portland, OR 97201–5047.
1 Applicant states that the Rollover Equity
FOR FURTHER INFORMATION CONTACT:
The
following is a summary of the
application. The complete application
may be obtained via the Commission’s
Web site by searching for the file
number, or an applicant using the
Company name box, at https://
www.sec.gov/search/search.htm or by
calling (202) 551–8090.
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SUPPLEMENTARY INFORMATION:
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20443
4. On March 2, 2009, the Commission
filed a complaint in the U.S. District
Court for the District of Oregon
(‘‘District Court’’) alleging that Sunwest
Management Inc. committed violations
of the federal securities laws in the
offering of interests in Sunwest.5 On
March 10, 2009, the District Court
entered an order in the SEC
Enforcement Action granting an
injunction and appointing a receiver
over the Sunwest entities. On December
22, 2009, the District Court entered an
order providing that all assets and
liabilities of Sunwest were consolidated
into the Bankruptcy Case, that equitable
title to real estate held by Sunwest was
consolidated into Debtor’s bankruptcy
estate, and that Debtor had the right to
convey title to, or interests in, real
property pursuant to a confirmed plan
of reorganization or other order of the
District Court.
5. On January 15, 2010, the Debtor
and Blackstone LLC entered into the
PSA providing for the sale or
contribution of substantially all of the
core assets of Sunwest, including the
interests in the properties owned by the
TIC Investors and the LLC Investors, to
Blackstone LLC or a successful bidder
who placed a higher bid at the ensuing
auction. After the bid deadline
established for such auction expired, the
District Court entered its order
identifying and approving Blackstone
LLC as the successful bidder and
purchaser under the PSA. The
Blackstone Acquisition closed on
August 5, 2010.
6. Applicants state that due to the
complex and unusual capital structure
of Sunwest, outright sale of the Sunwest
Assets to Blackstone LLC likely would
have resulted in adverse income tax
consequences to numerous Sunwest
Investors. Applicant states that, to
address tax consequences and certain
valuation concerns of Sunwest
Investors, the PSA and the Debtor’s plan
of reorganization provided that the
consideration paid by Blackstone LLC in
acquiring the Sunwest Assets would, at
the election of Sunwest Investors, take
the form of a combination of cash and/
or issuance of Rollover Equity Interests.
Sunwest Investors who elected to
receive interests in the Applicant
contributed their interests in the
Sunwest Assets and the bankruptcy
estate to Applicant in exchange for, at
their election: Applicant’s common
units or preferred units.6 Applicant in
5 SEC v. Sunwest Management, Inc., et al., Civil
Action No. CV 09–6056 HO (‘‘SEC Enforcement
Action’’).
6 Applicant states that no Sunwest Investor was
required to receive interests in Applicant; only
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20444
Federal Register / Vol. 77, No. 65 / Wednesday, April 4, 2012 / Notices
emcdonald on DSK29S0YB1PROD with NOTICES
turn contributed the property interests
to Blackstone LLC. The terms of
Applicant’s common units and
preferred units mirror the terms of the
Rollover Equity Interests that are held
by Applicant.7
7. Applicant states that its assets
consist exclusively of the Rollover
Equity Interests and the following shortterm instruments pending distributions
to Applicant’s members or
disbursements in payment of
Applicant’s obligations: (a) General
obligations of the United States, or its
agencies and instrumentalities; and/or
(b) deposit accounts with banks, which
accounts are insured by the Federal
Deposit Insurance Corporation or an
equivalent insuring organization
(collectively, the ‘‘Temporary
Investments’’).8
8. Applicant states that the District
Court has been actively involved in all
aspects of the Debtor’s reorganization,
including the development of
Applicant’s capital structure and the
terms of the Blackstone Acquisition.9 In
addition, committees of unsecured
creditors and TIC Investors were
established in 2009 to represent the
interests of Sunwest Investors and
creditors, and representatives of these
committees considered and discussed
numerous alternative methods of
maximizing the value of Sunwest
Investors’ interests in Sunwest,
including development of a stand-alone
plan of reorganization and the
acquisition of Sunwest properties by
third parties. The Blackstone
Acquisition was eventually determined
to be the most favorable alternative
available to Sunwest Investors and
creditors. Applicant states that the
negotiations which led to both the
structure of Applicant and the terms of
the PSA with Blackstone LLC were
Sunwest Investors who voluntarily elected to
receive interests in Applicant became members of
Applicant. In addition, Applicant states that neither
the common interests nor class A preferred units
that constitute the Rollover Equity Interests were
over-subscribed, so certain over-subscription
procedures developed in the Bankruptcy Case did
not become applicable.
7 Applicant also issued a third class of securities
to certain founders of Sunwest (‘‘Sunwest
Founders’’) that consists of contingent non-voting
profits interests (‘‘Profits Interests’’). The Profits
Interests entitle Sunwest Founders to receive a
portion of Applicant’s earnings if total distributions
and payments to Sunwest’s general unsecured
creditors and Sunwest Investors (not including
Sunwest Founders) aggregate in excess of $500
million. Applicant states that it is unlikely that the
Profits Interests will ever have value.
8 Applicant’s sole source of revenue is and will
continue to be its investment in Blackstone LLC
(other than any income from Temporary
Investments).
9 Applicant will continue to be subject to the
jurisdiction of the District Court.
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protracted, conducted at arm’s-length,
and actively participated in by Sunwest
Investors and their representatives,
counsel, investment bankers and other
advisors.
9. The Blackstone LLC Agreement
permits Blackstone LLC’s board of
directors to approve a proposal by BRE/
SW Member LLC (a member of
Blackstone LLC, ‘‘BREA’’) to request
that its members, including Applicant,
make additional capital contributions if
BREA determines in good faith: (a) That
Blackstone LLC requires additional
capital to meet its financial obligations;
or (b) that raising additional capital for
additional investment purposes is
advisable and in the best interests of
Blackstone LLC; provided, however,
such additional investments shall not
include additional facilities unless they
are contiguous or adjacent to
‘‘properties’’ (defined in the Blackstone
LLC Agreement to include specified
assisted living, memory care and skilled
nursing facilities) existing as of the date
of the Blackstone LLC Agreement. In
addition, Applicant’s limited liability
company agreement permits Applicant
to raise capital only for the purpose of
paying Applicant’s expenses or
responding to a capital request from
Blackstone LLC.10 Any offering by
Applicant, whether to pay its expenses
or to raise capital in response to a
capital call from Blackstone LLC, must
be conducted in compliance with
federal and state securities laws.11 In
any event, Applicant believes it is
unlikely that Applicant or Blackstone
LLC will request any additional capital.
Applicant’s Analysis
1. Applicant requests an order of the
Commission pursuant to sections 6(c)
and 6(e) of the Act exempting it from all
provisions of the Act and the rules
thereunder, except sections 9, 17(a),
17(d) and 17(e), Modified Section 31,
and sections 36 through 53 of the Act
and the rules thereunder. Applicant
requests relief until the earlier of August
5, 2015 or such time as Applicant no
10 Applicant does not anticipate that there will be
significant distributions to Applicant in the initial
years of operation of Blackstone LLC, but that
Applicant will have significant administrative,
compliance and similar expenses. Therefore,
Blackstone LLC has agreed to reimburse Applicant
$400,000 each year, and the Debtor has agreed to
loan Applicant up to a total of $2 million to permit
Applicant to pay its expenses.
11 Applicant states that, if it were to sell any
additional securities, the securities would be sold
to Applicant’s members and not to third parties.
Applicant states that an offering likely would be
made only to accredited investors under Rule 506
of Regulation D under the Securities Act of 1933
and all members of Applicant received notice of
such a possibility before electing to invest in
Applicant.
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longer meets the definition of an
investment company under the Act.
2. Applicant states that it meets the
definition of an investment company, as
defined in section 3(a)(1)(C) of the Act,
because: (a) Applicant has acquired
investment securities (i.e., interests in
Blackstone LLC) having a value
exceeding 40% of the value of
Applicant’s total assets; and (b) none of
the exemptions or exceptions specified
in the Act apply to Applicant in its
current form. Applicant states that, if
the Commission does not issue the
requested relief, Applicant may be
required to devote scarce financial and
other resources to comply with
provisions of the Act that Applicant
argues are not relevant or necessary
under Applicant’s circumstances.
Applicant also states that, although it
was formed as a limited liability
company rather than a liquidating trust,
in terms of its structure and function, as
well as the policies underlying the Act,
Applicant is indistinguishable from
liquidating trusts and other entities that
have been granted similar exemptions
by the Commission in the past.12
Applicant states that it is structured
with the goal of liquidating the Sunwest
Assets in an orderly manner and
distributing the liquidation proceeds to
its investors.
3. Section 6(c) provides that the
Commission may by order upon
application exempt any person or
persons, or any transaction or
transactions, from any provision of the
Act if such exemption is necessary or
appropriate in the public interest and
consistent with the protection of
investors and the purposes of the Act.
Section 6(e) provides that, in connection
with any order exempting an investment
company from any provision of section
7, certain provisions of the Act, as
specified by the Commission, shall
apply to the company and other persons
dealing with the company as if such
company were a registered investment
company.
4. Applicant states that it will be
subject to all of section 31 and the rules
thereunder, except that rule 31a–1(a)
will be modified to require retention of
the documents that constitute the record
forming the basis for the quarterly
unaudited financial statements and the
annual audited financial statements that
Applicant will provide to its members,
rather than the documents forming the
12 Drexel Burnham Lambert Group Inc.,
Investment Company Act Release Nos. 18643 (April
1, 1992) (notice) and 18675 (April 24, 1992) (order)
and LTV Aerospace Creditors Liquidating Trust,
Investment Company Act Release Nos. 19596 (July
26, 1993) (notice) and 19648 (August 24, 1993)
(order).
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Federal Register / Vol. 77, No. 65 / Wednesday, April 4, 2012 / Notices
basis for the financial statements that
would be filed pursuant to section 30 of
the Act. Under the requested relief,
Applicant will provide to its members:
(i) Annual audited financial statements
prepared in accordance with generally
accepted accounting principles and rule
1–02(d) of Regulation S–X; and (ii)
unaudited quarterly financial statements
prepared in accordance with generally
accepted accounting principles.
5. Applicant contends that the
following factors, among others, are
appropriate grounds for the requested
relief, particularly in view of the
provisions of the Act that will apply to
Applicant: (i) Sunwest Investors who
were eligible to receive interests in
Applicant, their counsel, investment
bankers and other advisors, as well as
the District Court and its appointed
mediators, were active participants in
designing and determining Applicant’s
structure; (ii) Applicant will continue to
be subject to the jurisdiction of the
District Court; (iii) transferability of
Applicant’s securities is severely
restricted; 13 (iv) Applicant has a limited
life and will liquidate upon the
liquidation of Blackstone LLC; and (v)
Applicant will not be engaged in the
business of investing, reinvesting or
trading in securities, and the only
securities that Applicant may hold are
its interests in Blackstone LLC and
Temporary Investments pending
distributions to Applicant’s members or
disbursements in payment of
Applicant’s obligations.
6. Accordingly, Applicant believes
that the issuance of the order pursuant
to sections 6(c) and 6(e) is appropriate
in the public interest, and consistent
with the protection of investors and the
purposes fairly intended by the policy
and provisions of the Act.
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Applicant’s Conditions
Applicant agrees that any order of the
Commission granting the requested
relief will be subject to the following
conditions:
1. Applicant will not own or hold
securities other than: (a) Interests in
Blackstone LLC and (b) Temporary
Investments.
2. Applicant will not offer additional
securities to its members, except in
connection with capital requests from
Blackstone LLC or to pay its expenses.
3. If Applicant sells additional
securities, such securities would be sold
at a price equal to or greater than the net
asset value of the securities at the time
of the offering.
13 Among
other restrictions, Applicant states that
it will limit transfers to transfers among members
or affiliates of members.
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4. Applicant’s governing documents
will not be amended to permit
Applicant’s securities to be freely
tradable.
5. Applicant will provide to its
members: (a) Quarterly unaudited
financial statements prepared in
accordance with generally accepted
accounting principles and (b) annual
audited financial statements prepared in
accordance with generally accepted
accounting principles and rule 1–02(d)
of Regulation S–X.
6. Applicant will be exempt until the
earlier of August 5, 2015 or such time
as Applicant no longer meets the
definition of an investment company
under the Act.
7. Applicant will not hold itself out as
an investment company.
For the Commission, by the Division of
Investment Management, under delegated
authority.
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–8061 Filed 4–3–12; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[File No. 500–1]
eMax Worldwide, Inc.; Order of
Suspension of Trading
April 2, 2012.
It appears to the Securities and
Exchange Commission that the public
interest and the protection of investors
require a suspension of trading in the
securities of eMax Worldwide, Inc. (CIK:
0000830519) because there is a lack of
current and accurate information
concerning its securities. eMax
Worldwide, Inc. has failed to make
periodic filings with the Commission
and has more than 300 shareholders of
record. eMax Worldwide, Inc. is quoted
on OTC Markets Group Inc. under the
ticker EMXC.
The Commission is of the opinion that
the public interest and the protection of
investors require a suspension of trading
in the securities of eMax Worldwide,
Inc. Therefore, it is ordered, pursuant to
Section 12(k) of the Securities Exchange
Act of 1934, that trading in the
securities of eMax Worldwide, Inc. is
suspended for the period from 9:30 a.m.
EDT on April 2, 2012, through 11:59
p.m. EDT on April 16, 2012.
By the Commission.
Jill M. Peterson,
Assistant Secretary.
BILLING CODE 8011–01–P
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–66679; File No. SR–FICC–
2012–03]
Self-Regulatory Organizations; Fixed
Income Clearing Corporation; Notice of
Filing of Proposed Rule Change to
Expand the One-Pot Cross-Margining
Program With New York Portfolio
Clearing, LLC to Certain ‘‘Market
Professionals’’
March 29, 2012.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder 2
notice is hereby given that on March 20,
2012, the Fixed Income Clearing
Corporation (‘‘FICC’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed change as
described in Items I and II below, which
Items have been prepared primarily by
FICC. The Commission is publishing
this notice to solicit comments on the
proposed change from interested
persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The proposed rule change consists of
modifications to certain rules of the
Government Securities Division
(‘‘GSD’’) of the Fixed Income Clearing
Corporation (‘‘FICC’’).
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
FICC included statements concerning
the purpose of and basis for the
proposed rule change and discussed any
comments it received on the proposed
rule change. The text of these statements
may be examined at the places specified
in Item IV below. FICC has prepared
summaries, set forth in sections (A), (B),
and (C) below, of the most significant
aspects of these statements.3
(A) Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
FICC is proposing to expand its
existing one-pot cross-margining
program with New York Portfolio
1 15
[FR Doc. 2012–8165 Filed 4–2–12; 11:15 am]
Sfmt 4703
20445
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 The Commission has modified the text of the
summaries prepared by FICC.
2 17
E:\FR\FM\04APN1.SGM
04APN1
]]>Agencies
[Federal Register Volume 77, Number 65 (Wednesday, April 4, 2012)]
[Notices]
[Pages 20442-20445]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-8061]
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SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 30014; File No. 812-13778]
Sunwest Rollover Member LLC; Notice of Application
March 29, 2012.
AGENCY: Securities and Exchange Commission (``Commission'').
[[Page 20443]]
ACTION: Notice of an application for exemption under the Investment
Company Act of 1940 (the ``Act'').
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SUMMARY: Summary of Application: Sunwest Rollover Member LLC
(``Applicant'') requests an order of the Commission pursuant to
sections 6(c) and 6(e) of the Act exempting it from all provisions of
the Act and the rules thereunder, except sections 9, 17(a), 17(d) and
17(e), section 31, as modified herein (``Modified Section 31''), and
sections 36 through 53 of the Act and the rules thereunder. Applicant
would be exempt until the earlier of August 5, 2015 or such time as it
no longer meets the definition of an investment company under the Act.
DATES: Filing Dates: The application was filed on May 28, 2010, and
amended on June 17, 2010, June 28, 2010, July 8, 2010, October 8, 2010,
February 22, 2011, September 6, 2011, and March 22, 2012.
Hearing or Notification of Hearing: An order granting the
application will be issued unless the Commission orders a hearing.
Interested persons may request a hearing by writing to the Commission's
Secretary and serving applicant with a copy of the request, personally
or by mail. Hearing requests should be received by the Commission by
5:30 p.m. on April 23, 2012 and should be accompanied by proof of
service on applicant, in the form of an affidavit or, for lawyers, a
certificate of service. Hearing requests should state the nature of the
writer's interest, the reasons for the request, and the issues
contested. Persons who wish to be notified of a hearing may request
notification by writing to the Commission's Secretary.
ADDRESSES: Elizabeth M. Murphy, Secretary, U.S. Securities and Exchange
Commission, 100 F Street NE., Washington, DC 20549-1090. Applicant,
2300 SW First Avenue, Suite 200, Portland, OR 97201-5047.
FOR FURTHER INFORMATION CONTACT: Jill Ehrlich, Senior Counsel, at (202)
551-6819, or Mary Kay Frech, Branch Chief, at (202) 551-6821 (Division
of Investment Management, Office of Investment Company Regulation).
SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained via the
Commission's Web site by searching for the file number, or an applicant
using the Company name box, at https://www.sec.gov/search/search.htm or
by calling (202) 551-8090.
Applicant's Representations
1. Applicant is a Delaware limited liability company formed for the
purpose of holding equity interests (``Rollover Equity Interests'') in
BRE/SW Portfolio LLC (``Blackstone LLC''),\1\ a Delaware limited
liability company, to resolve the bankruptcy of Sunwest (as defined
below). Applicant is managed by a three-person board of managers
(``Board of Managers'') elected by the members of Applicant.\2\
Although Applicant is authorized to exist until December 31, 2020,
Applicant expects that Blackstone LLC will have a limited life of up to
five years from its acquisition of the Sunwest Assets (as defined
below) and similarly also expects to liquidate and dissolve by August
5, 2015.
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\1\ Applicant states that the Rollover Equity Interests consist
of common interests and class A preferred units, each as defined in
the limited liability company agreement governing Blackstone LLC
(``Blackstone LLC Agreement'').
\2\ Applicant's limited liability company agreement requires
that two of the three members of the Board of Managers are not
``interested persons'' as defined in the Act.
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2. Blackstone LLC was formed to acquire substantially all of the
core assets (consisting of more than 140 senior living facilities
throughout the United States) (collectively, the ``Sunwest Assets'') of
``Sunwest,'' a group of related entities formerly involved in the
acquisition, development, design, construction, financing, insuring and
operation of senior living and other properties nationwide, along with
miscellaneous other related assets and operations.\3\
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\3\ The acquisition of the Sunwest Assets by Blackstone LLC is
referred to herein as the ``Blackstone Acquisition.'' The Blackstone
Acquisition is governed by the terms and conditions of an Agreement
of Purchase, Sale and Contribution dated as of January 15, 2010, and
amended on February 12, 2010, March 25, 2010 and July 13, 2010
(``PSA'').
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3. Prior to 2008, Sunwest operated 290 facilities and was one of
the largest assisted living providers in the United States. Sunwest
financed the acquisition and development of its senior living and other
properties through various means, including the sale to investors of
tenant-in-common interests (``TIC Investors'') and limited liability
company interests (``LLC Investors'') in properties owned by
Sunwest.\4\ On December 1, 2008, Stayton SW Assisted Living, L.L.C.,
one of the Sunwest entities (``Debtor''), initiated its bankruptcy case
(``Bankruptcy Case'') with the filing of a voluntary petition under
Chapter 11 of Title 11 of the United States Code.
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\4\ The TIC Investors and the LLC Investors are referred to
herein, collectively, as ``Sunwest Investors.''
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4. On March 2, 2009, the Commission filed a complaint in the U.S.
District Court for the District of Oregon (``District Court'') alleging
that Sunwest Management Inc. committed violations of the federal
securities laws in the offering of interests in Sunwest.\5\ On March
10, 2009, the District Court entered an order in the SEC Enforcement
Action granting an injunction and appointing a receiver over the
Sunwest entities. On December 22, 2009, the District Court entered an
order providing that all assets and liabilities of Sunwest were
consolidated into the Bankruptcy Case, that equitable title to real
estate held by Sunwest was consolidated into Debtor's bankruptcy
estate, and that Debtor had the right to convey title to, or interests
in, real property pursuant to a confirmed plan of reorganization or
other order of the District Court.
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\5\ SEC v. Sunwest Management, Inc., et al., Civil Action No. CV
09-6056 HO (``SEC Enforcement Action'').
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5. On January 15, 2010, the Debtor and Blackstone LLC entered into
the PSA providing for the sale or contribution of substantially all of
the core assets of Sunwest, including the interests in the properties
owned by the TIC Investors and the LLC Investors, to Blackstone LLC or
a successful bidder who placed a higher bid at the ensuing auction.
After the bid deadline established for such auction expired, the
District Court entered its order identifying and approving Blackstone
LLC as the successful bidder and purchaser under the PSA. The
Blackstone Acquisition closed on August 5, 2010.
6. Applicants state that due to the complex and unusual capital
structure of Sunwest, outright sale of the Sunwest Assets to Blackstone
LLC likely would have resulted in adverse income tax consequences to
numerous Sunwest Investors. Applicant states that, to address tax
consequences and certain valuation concerns of Sunwest Investors, the
PSA and the Debtor's plan of reorganization provided that the
consideration paid by Blackstone LLC in acquiring the Sunwest Assets
would, at the election of Sunwest Investors, take the form of a
combination of cash and/or issuance of Rollover Equity Interests.
Sunwest Investors who elected to receive interests in the Applicant
contributed their interests in the Sunwest Assets and the bankruptcy
estate to Applicant in exchange for, at their election: Applicant's
common units or preferred units.\6\ Applicant in
[[Page 20444]]
turn contributed the property interests to Blackstone LLC. The terms of
Applicant's common units and preferred units mirror the terms of the
Rollover Equity Interests that are held by Applicant.\7\
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\6\ Applicant states that no Sunwest Investor was required to
receive interests in Applicant; only Sunwest Investors who
voluntarily elected to receive interests in Applicant became members
of Applicant. In addition, Applicant states that neither the common
interests nor class A preferred units that constitute the Rollover
Equity Interests were over-subscribed, so certain over-subscription
procedures developed in the Bankruptcy Case did not become
applicable.
\7\ Applicant also issued a third class of securities to certain
founders of Sunwest (``Sunwest Founders'') that consists of
contingent non-voting profits interests (``Profits Interests''). The
Profits Interests entitle Sunwest Founders to receive a portion of
Applicant's earnings if total distributions and payments to
Sunwest's general unsecured creditors and Sunwest Investors (not
including Sunwest Founders) aggregate in excess of $500 million.
Applicant states that it is unlikely that the Profits Interests will
ever have value.
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7. Applicant states that its assets consist exclusively of the
Rollover Equity Interests and the following short-term instruments
pending distributions to Applicant's members or disbursements in
payment of Applicant's obligations: (a) General obligations of the
United States, or its agencies and instrumentalities; and/or (b)
deposit accounts with banks, which accounts are insured by the Federal
Deposit Insurance Corporation or an equivalent insuring organization
(collectively, the ``Temporary Investments'').\8\
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\8\ Applicant's sole source of revenue is and will continue to
be its investment in Blackstone LLC (other than any income from
Temporary Investments).
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8. Applicant states that the District Court has been actively
involved in all aspects of the Debtor's reorganization, including the
development of Applicant's capital structure and the terms of the
Blackstone Acquisition.\9\ In addition, committees of unsecured
creditors and TIC Investors were established in 2009 to represent the
interests of Sunwest Investors and creditors, and representatives of
these committees considered and discussed numerous alternative methods
of maximizing the value of Sunwest Investors' interests in Sunwest,
including development of a stand-alone plan of reorganization and the
acquisition of Sunwest properties by third parties. The Blackstone
Acquisition was eventually determined to be the most favorable
alternative available to Sunwest Investors and creditors. Applicant
states that the negotiations which led to both the structure of
Applicant and the terms of the PSA with Blackstone LLC were protracted,
conducted at arm's-length, and actively participated in by Sunwest
Investors and their representatives, counsel, investment bankers and
other advisors.
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\9\ Applicant will continue to be subject to the jurisdiction of
the District Court.
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9. The Blackstone LLC Agreement permits Blackstone LLC's board of
directors to approve a proposal by BRE/SW Member LLC (a member of
Blackstone LLC, ``BREA'') to request that its members, including
Applicant, make additional capital contributions if BREA determines in
good faith: (a) That Blackstone LLC requires additional capital to meet
its financial obligations; or (b) that raising additional capital for
additional investment purposes is advisable and in the best interests
of Blackstone LLC; provided, however, such additional investments shall
not include additional facilities unless they are contiguous or
adjacent to ``properties'' (defined in the Blackstone LLC Agreement to
include specified assisted living, memory care and skilled nursing
facilities) existing as of the date of the Blackstone LLC Agreement. In
addition, Applicant's limited liability company agreement permits
Applicant to raise capital only for the purpose of paying Applicant's
expenses or responding to a capital request from Blackstone LLC.\10\
Any offering by Applicant, whether to pay its expenses or to raise
capital in response to a capital call from Blackstone LLC, must be
conducted in compliance with federal and state securities laws.\11\ In
any event, Applicant believes it is unlikely that Applicant or
Blackstone LLC will request any additional capital.
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\10\ Applicant does not anticipate that there will be
significant distributions to Applicant in the initial years of
operation of Blackstone LLC, but that Applicant will have
significant administrative, compliance and similar expenses.
Therefore, Blackstone LLC has agreed to reimburse Applicant $400,000
each year, and the Debtor has agreed to loan Applicant up to a total
of $2 million to permit Applicant to pay its expenses.
\11\ Applicant states that, if it were to sell any additional
securities, the securities would be sold to Applicant's members and
not to third parties. Applicant states that an offering likely would
be made only to accredited investors under Rule 506 of Regulation D
under the Securities Act of 1933 and all members of Applicant
received notice of such a possibility before electing to invest in
Applicant.
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Applicant's Analysis
1. Applicant requests an order of the Commission pursuant to
sections 6(c) and 6(e) of the Act exempting it from all provisions of
the Act and the rules thereunder, except sections 9, 17(a), 17(d) and
17(e), Modified Section 31, and sections 36 through 53 of the Act and
the rules thereunder. Applicant requests relief until the earlier of
August 5, 2015 or such time as Applicant no longer meets the definition
of an investment company under the Act.
2. Applicant states that it meets the definition of an investment
company, as defined in section 3(a)(1)(C) of the Act, because: (a)
Applicant has acquired investment securities (i.e., interests in
Blackstone LLC) having a value exceeding 40% of the value of
Applicant's total assets; and (b) none of the exemptions or exceptions
specified in the Act apply to Applicant in its current form. Applicant
states that, if the Commission does not issue the requested relief,
Applicant may be required to devote scarce financial and other
resources to comply with provisions of the Act that Applicant argues
are not relevant or necessary under Applicant's circumstances.
Applicant also states that, although it was formed as a limited
liability company rather than a liquidating trust, in terms of its
structure and function, as well as the policies underlying the Act,
Applicant is indistinguishable from liquidating trusts and other
entities that have been granted similar exemptions by the Commission in
the past.\12\ Applicant states that it is structured with the goal of
liquidating the Sunwest Assets in an orderly manner and distributing
the liquidation proceeds to its investors.
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\12\ Drexel Burnham Lambert Group Inc., Investment Company Act
Release Nos. 18643 (April 1, 1992) (notice) and 18675 (April 24,
1992) (order) and LTV Aerospace Creditors Liquidating Trust,
Investment Company Act Release Nos. 19596 (July 26, 1993) (notice)
and 19648 (August 24, 1993) (order).
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3. Section 6(c) provides that the Commission may by order upon
application exempt any person or persons, or any transaction or
transactions, from any provision of the Act if such exemption is
necessary or appropriate in the public interest and consistent with the
protection of investors and the purposes of the Act. Section 6(e)
provides that, in connection with any order exempting an investment
company from any provision of section 7, certain provisions of the Act,
as specified by the Commission, shall apply to the company and other
persons dealing with the company as if such company were a registered
investment company.
4. Applicant states that it will be subject to all of section 31
and the rules thereunder, except that rule 31a-1(a) will be modified to
require retention of the documents that constitute the record forming
the basis for the quarterly unaudited financial statements and the
annual audited financial statements that Applicant will provide to its
members, rather than the documents forming the
[[Page 20445]]
basis for the financial statements that would be filed pursuant to
section 30 of the Act. Under the requested relief, Applicant will
provide to its members: (i) Annual audited financial statements
prepared in accordance with generally accepted accounting principles
and rule 1-02(d) of Regulation S-X; and (ii) unaudited quarterly
financial statements prepared in accordance with generally accepted
accounting principles.
5. Applicant contends that the following factors, among others, are
appropriate grounds for the requested relief, particularly in view of
the provisions of the Act that will apply to Applicant: (i) Sunwest
Investors who were eligible to receive interests in Applicant, their
counsel, investment bankers and other advisors, as well as the District
Court and its appointed mediators, were active participants in
designing and determining Applicant's structure; (ii) Applicant will
continue to be subject to the jurisdiction of the District Court; (iii)
transferability of Applicant's securities is severely restricted; \13\
(iv) Applicant has a limited life and will liquidate upon the
liquidation of Blackstone LLC; and (v) Applicant will not be engaged in
the business of investing, reinvesting or trading in securities, and
the only securities that Applicant may hold are its interests in
Blackstone LLC and Temporary Investments pending distributions to
Applicant's members or disbursements in payment of Applicant's
obligations.
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\13\ Among other restrictions, Applicant states that it will
limit transfers to transfers among members or affiliates of members.
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6. Accordingly, Applicant believes that the issuance of the order
pursuant to sections 6(c) and 6(e) is appropriate in the public
interest, and consistent with the protection of investors and the
purposes fairly intended by the policy and provisions of the Act.
Applicant's Conditions
Applicant agrees that any order of the Commission granting the
requested relief will be subject to the following conditions:
1. Applicant will not own or hold securities other than: (a)
Interests in Blackstone LLC and (b) Temporary Investments.
2. Applicant will not offer additional securities to its members,
except in connection with capital requests from Blackstone LLC or to
pay its expenses.
3. If Applicant sells additional securities, such securities would
be sold at a price equal to or greater than the net asset value of the
securities at the time of the offering.
4. Applicant's governing documents will not be amended to permit
Applicant's securities to be freely tradable.
5. Applicant will provide to its members: (a) Quarterly unaudited
financial statements prepared in accordance with generally accepted
accounting principles and (b) annual audited financial statements
prepared in accordance with generally accepted accounting principles
and rule 1-02(d) of Regulation S-X.
6. Applicant will be exempt until the earlier of August 5, 2015 or
such time as Applicant no longer meets the definition of an investment
company under the Act.
7. Applicant will not hold itself out as an investment company.
For the Commission, by the Division of Investment Management,
under delegated authority.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-8061 Filed 4-3-12; 8:45 am]
BILLING CODE 8011-01-P
