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4000 - Advisory Opinions

Notice of Acquisition of Control--Voting Control of Stock


February 10, 1981

Pamela E. F. LeCren, Attorney

On December 29, 1980 the Legal Division issued an opinion regarding the subject notice of change in bank control. That opinion dealt with whether or not the change in control would result in a prohibited management official interlock under the Depository Institution Management Interlocks Act (12 U.S.C. 3201 et seq., "Interlocks Act") and Part 348 of FDIC's regulations implementing the Interlocks Act. It was our determination, based upon the facts as set out in that opinion, that a prohibited interlock would result. We further indicated that the interlock question could be resolved if ***, the acquiring individual, were to place voting control of the stock with an independent proxy holder.

***, through his counsel, ***, has agreed to remove the interlocking management question by placing voting control over his stock in ***. According to information submitted to the regional office, *** is a partner in the New York law firm of ***. Neither the firm nor *** has been retained by ***. A subsidiary of *** (*** owns a 21.67% interest in *** and is its president and chief executive officer) retained *** to prepare a legal opinion regarding the validity of a certain mortgage approximately one year ago. *** did not partake in the writing of that opinion. There has been no continuing representation of the subsidiary nor is any such relationship contemplated.

*** is presently serving as escrow agent in connection with the stock transfer to take place between *** and the present owners. Under that agreement *** is to hold the stock until payment is received at which time it is expected *** will transfer the stock to ***. According to *** attorney, *** is serving as escrow agent solely at *** request and as a result of a past business association. *** had no such relationship with ***.

Based on the above, we are of the opinion that *** would qualify as an independent proxy holder.

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