PUBLIC VERSION

UNITED STATES OF AMERICA

BEFORE FEDERAL TRADE COMMISSION

In the Matter of

Service Corporation International,

a corporation.

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Docket No. C-3869

PETITION FOR APPROVAL OF

PROPOSED DIVESTITURE TO JCAM HOLDINGS LLC

Pursuant to Section 2.41(f) ofthe Federal Trade Commission ("Commission") Rules of

Practice, 16 C.F.R. § 2.41(f) (2006), and Paragraph VIII F.2.d. ofthe Commission's

Decision and Order in Docket No. C-3869 ("Order"), the Hold Separate and Divestiture

Trustee ("Trustee") appointed by the Commission under Paragraph VIII F.1. of the Order

hereby petitions the Commission to approve the divestiture of certain Memorial Funeral

Homes ("divestiture assets") to JCAM HOLDINGS LLC ("Buyer").

The divestiture assets subject to this petition include the McMullen and Colonial Funeral

Homes, as described in Paragraph VIII A.5. ofthe Order (hereafter the

"McMullen/Colonial assets"). These assets will be sold to Buyer pursuant to the Asset

Sale Agreement dated May 25, 2007 ("Sale Agreement"), by and among Buyer, SCI

Loan Services, LLC, SCI Alabama Funeral Services, Inc., and SCI Georgia Funeral

Services, Inc. (collectively "Sellers"). Sellers are affiliates that are controlled 100

percent by Service Corporation International ("SCI"). The executed Sale Agreement is

attached hereto as Confidential Exhibit A.

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I. Background

On December 27, 2006, the Commission issued an Order to Show Cause and Order

Modifying Order C'Modifying Order") permitting SCI to exercise its rights under

outstanding loan agreements and foreclose on the Memorial Funeral Homes, subject to

the prompt divestiture ofthese businesses by the Trustee appointed by the Commission.

The Trustee appointed is Thomas H. Johnson ofJohnson Consulting, and this petition is

submitted on his behalf. In January, 2007, SCI foreclosed on the Memorial Funeral

Homes and since that date those properties have been under the management and control

ofthe Trustee, as required by the Order.

Because this petition, including Confidential Exhibit A, contains confidential and

competitively sensitive information relating to the divestiture ofthe McMullen/Colonial

assets - the disclosure of which may prejudice the Buyer, harm the ongoing

competitiveness ofthe assets, and impair the Trustee's and Respondent's ability to

comply with the obligations ofthe Order - the Trustee has redacted such confidential

information from the public version ofthis petition. Pursuant to Sections 2.41(f)(4) and

4.9(c) ofthe Commission's Rules of Practice, 16 C.F.R. §§ 2.4 I(f)(4) & 4.9(c) (2006),

the Trustee requests that the confidential version ofthis petition and the information

contained herein be accorded confidential treatment under 5 U.S.C. § 552 and

Section 4.10(a)(2) ofthe Commission's Rules of Practice, 16 C.F.R. § 4.IO(a)(2) (2006).

The confidential version ofthis petition is also exempt from disclosure under Exemptions

4,7(A), 7(B), and 7(C) ofthe Freedom of Information Act, 5 U.S.c. §§ 552(b)(4),

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552(b)(7)(A), 552(b)(7)(B), & 552(b)(7)(C), and the Hart-Scott-Rodino Antitrust

Improvements Act of 1976, as amended, 15 U.S.C. § 18a(h).

The Trustee and the parties desire to complete the proposed divestiture ofthe

McMullen/Colonial assets as soon as possible following Commission approval. All preclosing conditions other than Commission approval have already been satisfied, so that

the Sellers and the Buyer are in a position to close the divestiture transaction within a few

days ofsuch approval.

Prompt consummation will further the purposes ofthe Order because it will allow the

Buyer to move forward on its business plans for the competitive operation ofthe divested

assets. The Trustee accordingly requests that the Commission promptly commence the

public comment period pursuant to Section 2.41(f)(2) ofthe Commission's Rules of

Practice, 16 C.F.R. § 2.41(f)(2) (2006), limit the public comment period to the customary

30-day period, and grant this petition by approving the divestiture ofthe

McMullen/Colonial assets as soon as practicable after the close ofthe public comment

period.

II. The Proposed Acquirer Will be a Strong and Effective Competitor

The owners ofthe Buyer-James McMullen and his son Allen-have extensive

experience in the funeral service business, primarily managing the two funeral homes

they are planning to acquire, one of which bears the McMullen family name. They have

obtained the necessary financing for the acquisition with coverage ratios that are well

within industry standards. As a result, the acquisition by the Buyer ofthe McMullen and

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Colonial Funeral Homes will assure that these businesses will continue to be strong and

effective competitors in the Columbus, Georgia and Phenix City, Alabama geographic

areas.

Industry Experience

The Buyer is a corporation that James McMullen and his son Allen have established for

the purpose of purchasing the McMullen and Colonial Funeral Homes. The McMullens,

together, will own 100 percent ofthis newly established company.

James McMullen attended Georgia Southwestern College and subsequently graduated

from the Dallas College of Mortuary Science in 1961. He initially entered the funeral

service business as an employee of Striffler Hamby Mortuary in Columbus, Georgia

where he was employed for 24 years. In 1987 he opened the McMullen Funeral Home,

which he sold to Preferred Funeral Directors in 1995. The investors who backed him

financially when he started the funeral home wanted to liquidate their investment.

Preferred ultimately sold the McMullen and Colonial Funeral Homes to Memorial

Operations, Inc. ("Memorial"), which owned them until SCI foreclosed on these

properties in January 2007. The foreclosure was due to the financial difficulties of

Memorial and its owner, and not as a result ofthe management of the McMullen and

Colonial Funeral Homes by James and Allen McMullen. In fact, these homes continued

to operate profitably under the management ofthe McMullens notwithstanding the

financial and regulatory problems encountered by other entities controlled by Memorial

and its owner.

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Allen McMullen graduated from Gupton Jones College of Mortuary Science in 1991 and

has been with the McMullen Funeral Home since his graduation. Under the prior

ownership, Allen served as General Manager of four locations, including McMullen

Funeral Home, Colonial Funeral Home, Pearson-Treadwell Funeral home in Blackshear,

Georgia, and Hollywood Cemetery in Houston, Texas. This experience will serve him

well as he concentrates on managing the McMullen and Colonial establishments.

Cecille McMullen, James' wife, has handled the financial affairs ofthe firm for

many years and will continue to do so in the future. In addition, because they will no

longer be subject to the burdens and distractions resulting from the prior ownership, the

McMuliens will be able to manage the McMullen and Colonial Funeral Homes more

efficiently and effectively.

The McMuliens have neither competitive assets nor agreements with other funeral homes

in the relevant geographic areas.

Financial Capability

The McMuliens will fund the acquisition from their own invested capital and borrowed

funds.

REDACTED

Based on the terms and projected cash flows, the Trustee believes that

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there will be adequate funds to service the debt and maintain a high level ofservice that

will be very competitive in the market.

Operational Matters

In addition to the hands-on experience that the McMullens will bring to bear on these

particular facilities, the new owners fully understand the competitive conditions in the

areas where the homes are located. They established the McMullen Funeral Home 20

years ago and have continued to build its reputation and value, first as owners and later as

managers under the ownership of Preferred and Memorial.

Because ofthis continuity, it is expected that most ofthe current employees will remain

with the business. At the same time, as independent owners, the McMullens will be able

to introduce a number of measures that will reduce costs and help the businesses to

operate more efficiently. These include:

REDACTED

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REDACTED

These efforts and others, including the reputation that the McMullens have earned for

quality, caring service to families, should enable them to operate these homes more

effectively and be an even stronger competitive force in the market.

III. The Proposed Divestiture Agreement Will Achieve the Purposes of the Order

and Result in No Harm to Competition

The proposed acquisition ofthe McMullen and Colonial Funeral Homes by the

McMullens, as embodied in the Asset Sale Agreement, will achieve the purposes ofthe

Order. James and Allen McMullen have significant industry experience and a proven

track record ofincreasing the number of families served. This experience should bode

well for the future ofthe businesses. The financial structure ofthe transaction will allow

adequate cash flow for further reinvestment in the firm. The fact that the McMullens will

be owners with a strong established reputation in the market (including their name on the

larger facility in Columbus, Georgia) will only enhance the competitive viability ofthese

homes.

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The proposed divestiture will result in no harm to competition as there is no overlap

between the operations ofthe new owners and the businesses they are seeking to acquire.

Consequently, this transaction does not raise any competitive issue. Indeed, since the

cash flows ofthe acquired homes will now be utilized solely for the purposes of

promoting these businesses, competition will be enhanced.

Respectfully submitted

On Behalfof Thomas H. Johnson

Hold Separate and Divestiture Trustee

::1:]&;:>-

David A. Clanton

Baker & McKenzie LLP

815 Connecticut Avenue

Washington, D.C. 20006

(202-452-7014)

Dated: May 29, 2007

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PUBLIC VERSION

CERTIFICATION OF TOM JOHNSON

The foregoing Petition has been prepared at my direction and the information contained

therein is, to the best ofmy knowledge, true, correct and complete.

Pursuant to 28 U.S.C. § 1746, I certify under penalty of perjury under the laws ofthe

Unit tat Q merica that the foregoing is true and correct.

Tom son

Johnson Consulting

Hold Separate and Divestiture Trustee

FTC Docket No. C-3869