13314 Federal Register / Vol. 87, No. 46 / Wednesday, March 9, 2022 / Notices 

following basic class(es) of controlled 

substance(s): 

Controlled substance Drug 

code Schedule 

Pentobarbital .................. 2270 II 

The company plans to import the 

listed controlled substance as bulk 

active pharmaceutical ingredient (API) 

for distribution to compounding 

pharmacies. It is intended for 

pharmacies who seek to compound the 

material into dosage units that will be 

distributed to terminally ill patients for 

‘‘medical aid in dying’’ (MAID) in U.S. 

states where MAID is authorized. No 

other activity for this drug code is 

authorized for this registration. 

Approval of permit applications can 

occur only when a registrant’s business 

activity is consistent with what is 

authorized under 21 U.S.C. 952(a)(2). 

Authorization will not extend to the 

import of Food and Drug 

Administration-approved or nonapproved finished dosage forms for 

commercial sale. 

Matthew J. Strait, 

Deputy Assistant Administrator. 

[FR Doc. 2022–04926 Filed 3–8–22; 8:45 am] 

BILLING CODE 4410–09–P 

DEPARTMENT OF JUSTICE 

Notice of Proposed Settlement 

Agreement Under the Oil Pollution Act 

Notice is hereby given that the United 

States of America, on behalf of the 

Department of the Interior (‘‘DOI’’) 

acting through the U.S. Fish and 

Wildlife Service, the State of Oregon 

represented by Oregon Department of 

Fish and Wildlife (‘‘ODFW’’), and the 

Confederated Tribes of the Siletz 

Indians (‘‘Tribes’’), (DOI, ODFW and 

Tribes collectively, the ‘‘Trustees’’), are 

providing an opportunity for public 

comment on a proposed Settlement 

Agreement (‘‘Settlement Agreement’’) 

among the Trustees and Blue Line 

Transportation Company, Inc. (‘‘Blue 

Line’’) . 

The settlement resolves the civil 

claims of the Trustees against Blue Line 

arising by virtue of their natural 

resource trustee authority under the Oil 

Pollution Act of 1990, 33 U.S.C. 2702 

for injury to, impairment of, destruction 

of, and loss of, diminution of value of 

and/or loss of use of natural resources 

resulting from the January 27, 2001 

discharge of approximately 5,800 

gallons of No. 6 fuel oil from a fuel 

tanker, owned by Blue Line, on U.S. 

Highway 20, near Toledo, Oregon. 

Under the proposed Settlement 

Agreement, Blue Line agrees to pay 

$175,000 to the DOI Natural Resource 

Damage Assessment and Restoration 

Fund, $25,000 to compensate for past 

assessment costs and $150,000 will be 

used for restoration activities to 

compensate the public for recreational 

and aquatic injuries. Blue Line will 

receive from the Trustees a covenant not 

to sue for the claims resolved by the 

settlement. 

The publication of this notice opens 

a period for public comment on the 

proposed Settlement Agreement. 

Comments on the proposed Settlement 

Agreement should be addressed to the 

Assistant Attorney General, 

Environment and Natural Resources 

Division and should refer to the CP 

Settlement Agreement, DJ No. 90–5–1– 

1–12115. All comments must be 

submitted no later than thirty (30) days 

after the publication date of this notice. 

Comments may be submitted either by 

email or by mail: 

To submit 

comments: Send them to: 

By e-mail ...... pubcomment-ees.enrd@

usdoj.gov. 

By mail ......... Assistant Attorney General, 

U.S. DOJ—ENRD, P.O. 

Box 7611, Washington, DC 

20044–7611. 

During the public comment period, 

the proposed Settlement Agreement 

may be examined and downloaded at 

this Justice Department website: https:// 

www.justice.gov/enrd/consent-decrees. 

We will provide a paper copy of the 

proposed Settlement Agreement upon 

written request and payment of 

reproduction costs. Please mail your 

request and payment to: Consent Decree 

Library, U.S. DOJ—ENRD, P.O. Box 

7611, Washington, DC 20044–7611. 

Please enclose a check or money order 

for $2.50 (25 cents per page 

reproduction cost) payable to the United 

States Treasury. 

Susan M. Akers, 

Assistant Section Chief, Environmental 

Enforcement Section, Environment and 

Natural Resources Division. 

[FR Doc. 2022–04960 Filed 3–8–22; 8:45 am] 

BILLING CODE 4410–15–P 

DEPARTMENT OF LABOR 

Employee Benefits Security 

Administration 

Proposed Exemptions From Certain 

Prohibited Transaction Restrictions 

AGENCY: Employee Benefits Security 

Administration, Labor. 

ACTION: Notice of proposed exemptions. 

SUMMARY: This document contains 

notices of pendency before the 

Department of Labor (the Department) of 

proposed exemptions from certain of the 

prohibited transaction restrictions of the 

Employee Retirement Income Security 

Act of 1974 (ERISA or the Act) and/or 

the Internal Revenue Code of 1986 (the 

Code). If granted, these proposed 

exemptions allow designated parties to 

engage in transactions that would 

otherwise be prohibited provided the 

conditions stated there in are met. This 

notice includes the following proposed 

exemptions: D–12031, Midlands 

Management Corporation 401(k) Plan; 

D–12012, The DISH Network 

Corporation 401(k) Plan and the 

EchoStar 401(k) Plan; D–12048, The 

Children’s Hospital of Philadelphia 

Pension Plan for Union-Represented 

Employees. 

DATES: All interested persons are invited 

to submit written comments or requests 

for a hearing on the pending 

exemptions, unless otherwise stated in 

the Notice of Proposed Exemption, by 

April 25, 2022. 

ADDRESSES: All written comments and 

requests for a hearing should be sent to 

the Employee Benefits Security 

Administration (EBSA), Office of 

Exemption Determinations, U.S. 

Department of Labor, Attention: 

Application No., stated in each Notice 

of Proposed Exemption via email to 

e-OED@dol.gov or online through http:// 

www.regulations.gov by the end of the 

scheduled comment period. Any such 

comments or requests should be sent by 

the end of the scheduled comment 

period. The applications for exemption 

and the comments received will be 

available for public inspection in the 

Public Disclosure Room of the 

Employee Benefits Security 

Administration, U.S. Department of 

Labor, Room N–1515, 200 Constitution 

Avenue NW, Washington, DC 20210. 

See SUPPLEMENTARY INFORMATION below 

for additional information regarding 

comments. 

SUPPLEMENTARY INFORMATION: 

Comments: 

In light of the current circumstances 

surrounding the COVID–19 pandemic 


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1The Department has considered exemption 

applications received prior to December 27, 2011 

under the exemption procedures set forth in 29 CFR 

part 2570, subpart B (55 FR 32836, 32847, August 

10, 1990). 

2 In proposing this exemption, the Department is 

not expressing an opinion regarding the merits of 

the Plan’s lawsuits against its former Plan service 

providers and related parties, or whether Midlands 

or related parties met their fiduciary duties with 

respect to the Plan assets that are the subject of the 

lawsuit. Among other things, this exemption 

preserves any right, claim, demand and/or cause of 

action the Plan may have against: (a) Any fiduciary 

of the Plan; (b) Midlands; and/or (c) any person or 

entity related to a person or entity described in (a)– 

(b). 

3As described in more detail below, the 

Restorative Payment was remitted directly to the 

Plan by Safety National as part of Safety National’s 

2018 acquisition of Midlands. 

4However, if there is an excess amount, Midlands 

may reduce the amount of the excess paid to the 

plan by the amount of reasonable attorney’s fees 

that Midlands incurred in pursuing the Lawsuits, if 

the fees were paid to unrelated third parties. 

caused by the novel coronavirus which 

may result in disruption to the receipt 

of comments by U.S. Mail or hand 

delivery/courier, persons are 

encouraged to submit all comments 

electronically and not to follow with 

paper copies. Comments should state 

the nature of the person’s interest in the 

proposed exemption and the manner in 

which the person would be adversely 

affected by the exemption, if granted. A 

request for a hearing can be requested 

by any interested person who may be 

adversely affected by an exemption. A 

request for a hearing must state: (1) The 

name, address, telephone number, and 

email address of the person making the 

request; (2) the nature of the person’s 

interest in the exemption and the 

manner in which the person would be 

adversely affected by the exemption; 

and (3) a statement of the issues to be 

addressed and a general description of 

the evidence to be presented at the 

hearing. The Department will grant a 

request for a hearing made in 

accordance with the requirements above 

where a hearing is necessary to fully 

explore material factual issues 

identified by the person requesting the 

hearing. A notice of such hearing shall 

be published by the Department in the 

Federal Register. The Department may 

decline to hold a hearing where: (1) The 

request for the hearing does not meet 

the requirements above; (2) the only 

issues identified for exploration at the 

hearing are matters of law; or (3) the 

factual issues identified can be fully 

explored through the submission of 

evidence in written (including 

electronic) form. 

Warning: All comments received will 

be included in the public record 

without change and may be made 

available online at http://

www.regulations.gov, including any 

personal information provided, unless 

the comment includes information 

claimed to be confidential or other 

information whose disclosure is 

restricted by statute. If you submit a 

comment, EBSA recommends that you 

include your name and other contact 

information in the body of your 

comment, but DO NOT submit 

information that you consider to be 

confidential, or otherwise protected 

(such as Social Security number or an 

unlisted phone number) or confidential 

business information that you do not 

want publicly disclosed. However, if 

EBSA cannot read your comment due to 

technical difficulties and cannot contact 

you for clarification, EBSA might not be 

able to consider your comment. 

Additionally, the http://

www.regulations.gov website is an 

‘‘anonymous access’’ system, which 

means EBSA will not know your 

identity or contact information unless 

you provide it in the body of your 

comment. If you send an email directly 

to EBSA without going through http:// 

www.regulations.gov, your email 

address will be automatically captured 

and included as part of the comment 

that is placed in the public record and 

made available on the internet. 

Notice to Interested Persons 

Notice of the proposed exemptions 

will be provided to all interested 

persons in the manner agreed upon by 

the applicant and the Department, 

unless otherwise stated in the Notice of 

Proposed Exemption, within 15 days of 

the date of publication in the Federal 

Register. Such notice shall include a 

copy of the notice of proposed 

exemption as published in the Federal 

Register and shall inform interested 

persons of their right to comment and to 

request a hearing (where appropriate). 

The proposed exemptions were 

requested in applications filed pursuant 

to section 408(a) of the Act and/or 

section 4975(c)(2) of the Code, and in 

accordance with procedures set forth in 

29 CFR part 2570, subpart B (76 FR 

66637, 66644, October 27, 2011).1

Effective December 31, 1978, section 

102 of Reorganization Plan No. 4 of 

1978, 5 U.S.C. App. 1 (1996), transferred 

the authority of the Secretary of the 

Treasury to issue exemptions of the type 

requested to the Secretary of Labor. 

Therefore, these notices of proposed 

exemption are issued solely by the 

Department. 

The applications contain 

representations with regard to the 

proposed exemptions which are 

summarized below. Interested persons 

are referred to the applications on file 

with the Department for a complete 

statement of the facts and 

representations. 

Midlands Management Corporation 

401(k) Plan 

Oklahoma City, OK 

[Application No. D–12031] 

Proposed Exemption 

The Department is considering 

granting an exemption under the 

authority of Section 408(a) of the 

Employee Retirement Income Security 

Act of 1974 (ERISA), in accordance with 

the procedures set forth in 29 CFR part 

2570, subpart B (76 FR 46637, 66644, 

October 27, 2011). The proposed 

exemption relates to lawsuits and a 

Chapter 7 Bankruptcy Claim (together, 

the Lawsuits) filed on behalf of the 

Midlands Management Corporation 

401(k) Plan (the Plan) against former 

Plan service providers and related 

parties.2 The exemption would permit 

the payment of $8,292,189 to the Plan 

on December 18, 2018, by Safety 

National Casualty Corporation (Safety 

National), the corporate parent of 

Midlands Management Corporation 

(Midlands or the Applicant),3 the Plan 

sponsor, in exchange for the Plan’s 

assignment to Midlands of the Plan’s 

right to proceeds from the Lawsuits (the 

Assigned Interests). 

The proposed exemption also would 

permit the potential additional cash 

payment(s) by Midlands to the Plan if 

the amount(s) Midlands recovers from 

the Assigned Interests exceeds 

$8,292,189. Midlands would be required 

to immediately transfer the difference to 

the Plan (i.e., an amount equal to the 

excess between the Assigned Interest 

proceeds and $8,292,189 (the Excess 

Recovery Amount)).4 If Midlands 

receives less than $8,292,189 in 

proceeds from the Assigned Interests, 

then Midlands would be required to 

automatically forgive any unrecovered 

shortfall amount. No Plan assets may be 

transferred to Midlands in connection 

with this exemption, if granted, and 

Midlands would not be permitted to 

receive or retain any proceeds from the 

Lawsuits other than from the Assigned 

Interests. All of the transactions that are 

the subject of this exemption (the 

Covered Transactions) and their terms 

would have to be reviewed and 

monitored by a qualified, independent 

fiduciary, who, among other things, 

must complete and submit a report to 

the Department confirming that all of 


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5For purposes of this proposed exemption 

reference to specific provisions of Title I of the 

ERISA, unless otherwise specified, should be read 

to refer as well to the corresponding Code 

provisions. 

6The Department notes that availability of this 

exemption would be subject to the express 

condition that the material facts and representations 

contained in application D–12031 are true and 

complete, and accurately describe all material terms 

of the transactions covered by the exemption. If 

there were any material change in a transaction 

covered by the exemption, or in a material fact or 

representation described in the application, the 

exemption would cease to apply as of the date of 

the change. 

7To calculate lost earnings, Beasley applied the 

higher of the Plan’s actual rate of return as a whole, 

or the rate of return for the highest performing fund 

in the Plan’s lineup. Beasley represents that, 

because of market volatility, the Plan’s rate of return 

was negative for the 4th quarter of 2018. Beasley 

therefore used the fund with the highest rate of 

return which was the T. Rowe Price Blue Chip 

Growth fund which had returned 5.32% year-todate. In addition, Beasley represents that it 

calculated lost dividends on participant accounts 

and that the average lost dividends calculation was 

4.28%. 

the requirements of this exemption, if 

granted, have been met.5

Summary of Facts and 

Representations 6

Background 

1. Midlands. Midlands is a managing 

general agent, wholesale broker, 

program administrator and insurance 

services provider located in Oklahoma 

City, Oklahoma. 

2. The Plan. Midlands sponsors the 

Plan, which is an individual account 

defined contribution plan. Plan 

participants may contribute to their 

individual Plan accounts through either 

pretax or Roth deferrals. The Plan is 

administered by the Retirement Plan 

Committee (the Committee), which is 

appointed by Midland’s board of 

directors. As of December 31, 2020, the 

Plan covered 147 participants and held 

$15,088,875 in total assets. 

3. Vantage Benefit Administrators. Up 

until November 30, 2017, Vantage 

Benefit Administrators (Vantage) served 

as the Plan’s recordkeeper and thirdparty administrator. In this capacity, 

Vantage’s responsibilities included 

providing periodic statements to Plan 

participants and maintaining records of 

participant account balances. 

4. The Unauthorized Transfers. The 

Applicant represents that, beginning as 

early as 2013, and continuing through 

2017, Vantage caused the unauthorized 

transfers of Plan assets directly to an 

account that Vantage used to operate its 

own business. Vantage caused 180 such 

unauthorized transfers that totaled in 

excess of $5.5 million. Vantage 

concealed the transfers via false account 

statements and reports. 

5. RSM and the Failure to Monitor. 

Beginning in 2013 and continuing 

through 2016, Midlands retained RSM 

US, LLP (RSM), an audit, tax, and 

consulting firm, to audit the Plan on a 

regular basis. In this capacity, RSM 

completed annual audit reports of the 

Plan for the years 2013 through 2016. 

The Applicant represents that the 

Committee relied upon RSM’s audit 

findings as a ‘‘critical means’’ to 

monitor Vantage’s administration of the 

Plan. The Applicant further represents 

that RSM’s audit reports ultimately 

failed to detect the unauthorized 

withdrawals of Plan assets by Vantage. 

By Nov. 1, 2017, Vantage’s unauthorized 

withdrawals had reduced total Plan 

assets to $2,406,654.94, an amount that 

was approximately $8 million less than 

the total reported by RSM in an audit 

report dated two weeks prior (Oct. 13, 

2017). 

6. Beasley and the Calculation of Plan 

Losses. The Applicant represents that 

Midlands first became aware of 

Vantage’s unauthorized withdrawals on 

October 25, 2017. At that time, 

Midlands engaged Beasley & Company 

of Tulsa, Oklahoma (Beasley) to 

investigate and assess Plan losses 

incurred in connection with Vantage’s 

unauthorized withdrawals. The 

Applicant represents that Beasley is not 

affiliated with Midlands, Safety 

National, or the Plan. Beasley ultimately 

concluded that the Plan’s total losses 

incurred in connection with Vantage’s 

unauthorized withdrawals was 

$9,292,189, an amount which includes 

the principal amount misappropriated 

by Vantage, plus associated lost 

interest.7

7. ERISA Lawsuit, Judgment and 

Bankruptcy. On December 20, 2017, the 

Plan and Midlands filed suit against 

Vantage and its principals, Jeffrey and 

Wendy Richie, in the United States 

District Court for the Northern District 

of Texas in Case No.: 3:17–cv–03459. 

The complaint alleges that Vantage 

improperly transferred assets from the 

Plan. On March 18, 2018, Midlands and 

the Plan obtained a final judgment (the 

Judgment) against Vantage and the 

Richies that awarded $10,170,452.00, 

plus post judgment interest, including 

an award of $297,836.75 in attorneys’ 

fees. 

On April 19, 2018, an involuntary 

Chapter 7 bankruptcy petition was filed 

against Vantage by certain of its 

creditors in the Northern District of 

Texas (the Vantage Bankruptcy). The 

Plan and Midlands have filed a creditor 

claim against the bankruptcy estate of 

Vantage. The Vantage Bankruptcy is 

ongoing. 

8. Other Claims. In addition to the 

Claims against Vantage and the Richies, 

the Plan and Midlands filed Claims 

against the following entities: (a) Matrix 

Trust Company (Matrix Trust), formerly 

known as MG Trust, the Plan’s 

custodian; and (b) RSM and Cole & 

Reed, P.C. (Cole & Reed), the Plan’s 

former auditors, for misrepresentation, 

breach of contract, breach of fiduciary 

duties, violations of state law, aiding 

and abetting, failure to supervise, and 

common law fraud. Collectively, the 

claims against these parties, as well as 

against Vantage and the Richies, are 

hereinafter referred to as the Lawsuits. 

9. Plan’s Payment from Federal 

Insurance Company. On November 5, 

2018, the Plan received a $1,000,000 

insurance settlement payment in 

connection with the unauthorized 

transfers. This settlement payment came 

via the Plan’s crime policy with Federal 

Insurance Company and was 

subsequently allocated to participant 

accounts and reported as ‘‘other 

contributions’’ in the Plan’s statement of 

changes in net assets available for 

benefits for the year ended December 

31, 2018. 

10. Safety National Acquires 

Midlands. Before December 18, 2018, 

Midlands was owned by Caldwell & 

Partners, Inc. (CAP) and certain 

individual shareholders of Caldwell 

Partners, Inc. (the CAP Shareholders). 

On December 18, 2018, Midlands was 

acquired by Safety National. Under the 

Stock Purchase Agreement governing 

the acquisition, CAP and Midlands 

merged, with Midlands surviving the 

merger. Safety National acquired 

Midlands for a base purchase price of 

$33 million, minus certain itemized 

expenses. Among these itemized 

expenses was an $8,292,189 restorative 

payment to the Plan to restore losses 

caused by the unauthorized 

withdrawals of Plan assets by Vantage 

(the Restorative Payment). This 

$8,292,189 Restorative Payment was 

remitted directly to the Plan by Safety 

National as part of Safety National’s 

acquisition of Midlands. Midlands 

currently is a wholly-owned subsidiary 

of Safety National. 

Restitution Made to the Plan 

11. The Restorative Payment. The 

Applicant represents that the $8,292,189 

Restorative Payment addresses the 

$9,292,189 in aggregate losses incurred 

by the Plan, as calculated by the Plan’s 

Independent Fiduciary, minus the 

$1,000,000 settlement payment that the 

Plan received from Federal Insurance 

Company. 

12. The Recovery Rights Agreement. 

In exchange for the Restorative 


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8ERISA Section 410 provides, in part, that 

‘‘except as provided in ERISA sections 405(b)(1) 

and 405(d), any provision in an agreement or 

instrument which purports to relieve a fiduciary 

from responsibility or liability for any 

responsibility, obligation, or duty under this part 

[meaning ERISA Section 410(a)] shall be void as 

against public policy.’’ 

Payment, the Plan transferred the 

Assigned Interests to Midlands pursuant 

to a Recovery Rights Agreement. As 

discussed throughout this exemption, 

the Assigned Interests represent the 

Plan’s rights to receive proceeds from 

the Lawsuits, with the limitations 

described below. The Recovery Rights 

Agreement provides that the Assigned 

Interests consist of the Plan’s rights, 

title, and interests in and to all financial 

recoveries payable with respect to the 

claims underlying the Lawsuits. Under 

the terms of this proposed exemption, 

Midlands could not receive or retain 

any proceeds from the Lawsuits other 

than from the Assigned Interests. 

If Midlands recovers more than 

$8,292,189 (i.e., the Restorative Payment 

amount) from the Assigned Interests, 

Midlands would be required to 

immediately transfer that excess to the 

Plan. However, Midlands may reduce 

the excess amount (but not the 

Restorative Payment Amount) by the 

amount of reasonable attorney’s fees 

that Midlands paid to unrelated third 

parties while pursuing the Assigned 

Interests. Any amount transferred to the 

Plan must be accurately and properly 

allocated to Plan participants’ accounts. 

Conversely, if Midlands recovers less 

than $8,292,189 from the Assigned 

Interests (a) the Plan would not be 

required to repay any amount of the 

Restorative Payment back to Midlands, 

and (b) Midlands would be solely 

responsible for all costs and expenses 

associated with pursuing the Assigned 

Interests. 

As required under this exemption and 

as noted above, in entering into the 

Recovery Rights Agreement, or for any 

other reason, the Plan did not release 

any claims, demands, and/or causes of 

action which it may have or have had 

against any fiduciary of the Plan, 

Midland and/or any person or entity 

related to the Plan or to Midlands. As 

required under this exemption and as 

the Applicant represents, the Plan has 

not and will not incur any expenses or 

bear any costs in connection with the 

assignment of its rights under the 

Recovery Rights Agreement, the 

Lawsuits, or the exemption request 

submitted on behalf of the Plan. As 

required by this exemption and as stated 

in the Recovery Rights Agreement, the 

Plan has not and will not pay any 

interest with respect to the Restorative 

Payment, and no Plan assets were 

pledged to secure the Restorative 

Payment. Finally, this exemption 

requires the Covered Transactions not to 

involve any risk of loss to either the 

Plan or the participants and 

beneficiaries of the Plan. 

13. Efforts to Recover from Vantage 

and Other Responsible Parties. In its 

initial application for exemptive relief, 

the Applicant estimated that the 

ultimate recovery amounts from the 

Assigned Interests would be as follows: 

(a) $1.3 million from Matrix Trust; (b) 

$2.8 million from RSM LLP and Cole & 

Reed; and (c) between $500,000 and $2 

million from the Chapter 7 Estate of 

Vantage. The Applicant has since 

supplemented this information and 

represents that it anticipates recovering 

up to $4 million total, or approximately 

49 percent of the Restorative Payment 

amount. The Applicant represents that 

the only remaining claim is the creditor 

claim against the bankruptcy estate of 

Vantage, which is not expected to result 

in any recovery. 

Independent Fiduciary Oversight 

14. The Independent Fiduciary. 

Midlands retained Prudent Fiduciary 

Services, LLC (PFS) of West Covina, 

California, to serve as the independent 

fiduciary to the Plan with respect to the 

Covered Transactions. The Applicant 

represents that the selection of PFS was 

based solely on PFS’s qualifications to 

serve as a qualified independent 

fiduciary, and was made after a prudent 

process, and without regard to whether 

PFS’s views were likely to favor the 

interests of Midlands, or related parties. 

PFS provides Independent Fiduciary, 

ERISA compliance consulting, and 

expert witness services related to 

employee benefit plans. PFS represents 

that its duties and obligations as the 

Plan’s Independent Fiduciary are being 

carried out by Miguel Paredes. Mr. 

Paredes is the founder of PFS. 

PFS represents and certifies that 

neither PFS nor Mr. Paredes has, or has 

had, any material connection or 

relationship with either Midlands or the 

Plan that would create a conflict of 

interest or prevent PFS or Mr. Paredes 

from carrying out the duties and 

obligations required of him as 

Independent Fiduciary to the Plan for 

the purposes of the Covered 

Transactions. PFS also represents that 

the total revenue it has received in each 

year, from all parties in interest to this 

exemption, including Midlands and the 

Plan, represents approximately 0.25% of 

PFS’s total revenue from its prior tax 

year. 

15. In connection with its engagement 

as Independent Fiduciary, PFS 

represents the following: (a) No party 

related to this exemption has, or will, 

indemnify PFS in whole or in part for 

negligence and/or for any violation of 

state or federal law that may be 

attributable to PFS in performing its 

duties as Independent Fiduciary on 

behalf of the Plan; (b) no contract or 

instrument that PFS enters into with 

respect to the Covered Transactions that 

are the subject of the exemption 

purports to waive any liability under 

state or federal law for any such 

violation by PFS; (c) neither PFS, nor 

any parties related to PFS, have 

performed any prior work on behalf of 

Midlands, or on behalf of any party 

related to Midlands; (d) neither PFS, nor 

any parties related to PFS, have any 

financial interest with respect to PFS’s 

work as Independent Fiduciary, apart 

from the express fees and 

reimbursement for reasonable expenses 

paid to PFS to represent the Plan with 

respect to the Covered Transactions that 

are the subject of this exemption; (e) 

neither PFS, nor any parties related to 

PFS, have received any compensation or 

entered into any financial or 

compensation arrangements with 

Midlands, or any parties related to 

Midlands; and (f) that PFS has not and 

will not enter into any agreement or 

instrument that violates ERISA Section 

410 or the Department’s Regulations 

Section 2509.75–4.8 The Department 

notes that PFS’s continued compliance 

with each of these representations is a 

condition of the exemption. 

16. Independent Fiduciary Duties. As 

Independent Fiduciary, PFS must: (a) 

Review the terms and conditions of the 

Restorative Payment, the Recovery 

Rights Agreement, and the proposed 

and final exemption; (b) determine that 

the Covered Transactions are prudent, 

in the interest of, and protective of the 

Plan and its participants and 

beneficiaries; (c) confirm that the 

Restorative Payment amount has been 

made to the Plan and appropriately 

allocated; (d) continually monitor the 

Lawsuits and the Assigned Interests on 

an ongoing basis to determine whether 

any excess recovery amount should be 

remitted to and retained by the Plan; 

and (e) represent that it has not and will 

not enter into any agreement or 

instrument that violates ERISA Section 

410 or the Department’s Regulations 

Section 2509.75–4. 

Additionally, not later than 90 days 

after the resolution of Midland’s efforts 

to collect proceeds from the Assigned 

Interests, the Independent Fiduciary 

must submit a written statement to the 

Department demonstrating that all of the 


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terms and conditions of the exemption 

have been met. 

17. The Independent Fiduciary 

Report. On September 4, 2020, Mr. 

Paredes completed his Independent 

Fiduciary Report (the Independent 

Fiduciary Report), wherein he 

determined that the Covered 

Transactions were prudent, in the 

interest of, and protective of the Plan 

and its participants and beneficiaries. In 

developing his Independent Fiduciary 

Report, Mr. Paredes represents that he: 

(a) Conducted a review of documents 

related to the litigation involving the 

Plan, as well as the Assigned Interests; 

(b) reviewed documents related to the 

terms and conditions of the Recovery 

Rights Agreement; (c) conducted 

discussions with Midland’s counsel; 

and (d) reviewed applicable laws and 

guidance. 

In the Independent Fiduciary Report, 

Mr. Paredes states that the Covered 

Transactions are reasonable, prudent, 

and in the best interest of the Plan and 

its participants and beneficiaries. Mr. 

Paredes states that the Recovery Rights 

Agreement presents a recovery scenario 

that appears to come with no risk of loss 

to the Plan and its participants and 

appears overall to be fair and reasonable 

from the Plan’s perspective. Mr. Paredes 

states that the Plan will not be 

responsible for, nor bear any of the 

expenses or costs associated with, the 

litigation to recover on the Assigned 

Interests. Mr. Paredes states that the 

Covered Transactions benefit the Plan’s 

participants and beneficiaries by 

allowing them to immediately receive 

the benefit of the Restorative Payment 

amount, as opposed to having to wait 

for the Lawsuits to run their normal 

course, which could be quite lengthy. 

Mr. Paredes states that the Plan and 

its participants and beneficiaries will 

benefit from provisions in the Recovery 

Rights Agreement that would protect 

them if the actual recovery amounts 

obtained from the Assigned Interests 

were different than the Restorative 

Payment amount received by the Plan. 

In this regard, Mr. Paredes explains that 

if the actual recovery amount obtained 

by Midlands from the Assigned Interests 

were less than the Restorative Payment 

amount, Midlands would automatically 

forgive any unrecovered shortfall 

amount. However, if the actual recovery 

amount received were more than the 

Restorative Payment amount, the Plan 

would receive and retain any such 

excess recovery amount. As noted 

above, this proposed exemption would 

require the Independent Fiduciary to 

continually monitor the Lawsuits and 

the Assigned Interests on an ongoing 

basis to determine whether there is an 

excess recovery amount that would be 

remitted to and retained by the Plan. 

In sum, Mr. Paredes concludes that, 

under the terms of the Recovery Rights 

Agreement, the Covered Transactions 

allow the Plan to receive the immediate 

benefit of the Restorative Payment while 

preserving the right to retain any excess 

recovery amounts associated with the 

Assigned Interests. Mr. Paredes states 

that the terms and conditions of the 

Recovery Rights Agreement are at least 

equivalent to, and for all intents and 

purposes, more favorable than the terms 

and conditions the Plan would have 

been able to obtain in an arm’s length 

transaction with an unrelated party. Mr. 

Paredes further states that, as a result of 

the Covered Transactions, the Plan’s 

participants and beneficiaries, would 

not lose any benefits, and the Plan 

would not be harmed or legally or 

financially impaired. 

ERISA Analysis 

18. ERISA Section 406(a)(1)(A) 

prohibits a plan fiduciary from causing 

the plan to engage in a transaction if the 

fiduciary knows or should know that 

such transaction constitutes a direct or 

indirect sale or exchange of any 

property between the plan and a partyin-interest. Midlands, as an employer 

whose employees are covered by the 

Plan, is a party-in-interest with respect 

to the Plan under ERISA Section 

3(14)(C). Midlands’s contribution of the 

Restorative Payments to the Plan and 

the Plan’s potential repayment to 

Midlands with litigation or settlement 

proceeds would constitute 

impermissible exchanges between the 

Plan and a party-in-interest in violation 

of ERISA Section 406(a)(1)(A). 

ERISA Section 406(a)(1)(D) prohibits a 

plan fiduciary from causing a plan to 

engage in a transaction if the fiduciary 

knows or should know that the 

transaction constitutes a direct or an 

indirect transfer to, or use by or for the 

benefit of, a party-in-interest, of the 

income or assets of the plan. The 

Committee is a party-in-interest with 

respect to the Plan under ERISA Section 

3(14)(A), because it is plan fiduciary. 

The Restorative Payment to the Plan and 

the Plan’s corresponding assignment of 

Lawsuit proceeds to Midlands pursuant 

to the Recovery Rights Agreement 

violate ERISA Section 406(a)(1)(D). 

Statutory Findings 

19. Based on the conditions that are 

included in this proposed exemption, 

the Department has tentatively 

determined that the relief sought by the 

Applicant would satisfy the statutory 

requirements for the Department to 

make the following findings to grant an 

exemption under ERISA Section 408(a). 

a. The Proposed Exemption Is 

‘‘Administratively Feasible.’’ The 

Department has tentatively determined 

that the proposed exemption is 

administratively feasible. In this regard 

the Department notes that the 

Independent Fiduciary must represent 

the interests of the Plan for all purposes 

with respect to the Covered 

Transactions. Further, not later than 90 

days after the resolution of Midland’s 

efforts to collect proceeds from the 

Assigned Interests, the Independent 

Fiduciary must submit a written 

statement to the Department 

demonstrating that the Covered 

Transactions have met all of the terms 

and conditions of the exemption. 

b. The Proposed Exemption Is ‘‘In the 

Interests of the Plan.’’ The Department 

has tentatively determined that the 

proposed exemption is in the interests 

of the Plan and its participants. The 

Restorative Payment immediately 

provided the Plan with $8,292,189 in 

cash. If the Plan did not receive the 

immediate Restorative Payment, the 

individual account balances of Plan 

participants would have remained 

underfunded in the aggregate by 

$8,292,189 until the Lawsuits were 

resolved. 

c. The Proposed Exemption Is 

‘‘Protective of the Plan.’’ The 

Department has tentatively determined 

that the proposed exemption is 

protective of the rights of Plan 

participants and beneficiaries. Among 

other things, if Midlands ultimately 

receives more than $8,292,189 from the 

Assigned Interests, Midlands must 

immediately transfer the excess between 

the Assigned Interest proceeds and 

$8,292,189 to the Plan. If Midlands 

receives less than $8,292,189 from the 

Assigned Interest, then Midlands must 

automatically forgive any unrecovered 

shortfall amount. 

Summary 

20. Based on the conditions that are 

included in this proposed exemption, 

the Department has tentatively 

determined that the relief sought by the 

Applicant would satisfy the statutory 

requirements for an exemption under 

ERISA Section 408(a). 

Proposed Exemption 

The Department is considering 

granting an exemption under the 

authority of ERISA Section 408(a) and 

Code Section 4975(c)(2) and in 

accordance with the procedures set 

forth in 29 CFR part 2570, subpart B (55 

FR 32836, 32847, August 10, 1990). 


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Section I. Definitions 

(a) The term ‘‘Assigned Interests’’ 

means the Plan’s right to proceeds from 

the Lawsuits, which were transferred to 

Midlands in return for the Restorative 

Payment. 

(b) The term ‘‘Independent Fiduciary’’ 

means Prudent Fiduciary Services, LLC 

or a successor Independent Fiduciary, to 

the extent PFS or the successor 

Independent Fiduciary continues to 

serve in such capacity, and who: 

(1) Is not an affiliate of Midlands and 

does not hold an ownership interest in 

Midlands or affiliates of Midlands; 

(2) Was not a fiduciary with respect 

to the Plan before its appointment to 

serve as the Independent Fiduciary; 

(3) Has acknowledged in writing that 

it: 

(i) Is a fiduciary with respect to the 

Plan and has agreed not to participate in 

any decision regarding any transaction 

in which it has an interest that might 

affect its best judgment as a fiduciary; 

and 

(ii) Has appropriate technical training 

or experience to perform the services 

contemplated by the exemption; 

(4) Has not entered into any 

agreement or instrument that violates 

the prohibitions on exculpatory 

provisions in ERISA Section 410 or the 

Department’s regulation relating to 

indemnification of fiduciaries at 29 CFR 

2509.75–4; 

(5) Has not received gross income 

from Midlands or affiliates of Midlands 

for that fiscal year in an amount that 

exceeds two percent (2%) of the 

Independent Fiduciary’s gross income 

from all sources for the prior fiscal year. 

This provision also applies to a 

partnership or corporation of which the 

Independent Fiduciary is an officer, 

director, or 10 percent (10%) or more 

partner or shareholder, and includes as 

gross income amounts received as 

compensation for services provided as 

an independent fiduciary under any 

prohibited transaction exemption 

granted by the Department; and 

(6) No organization or individual that 

is an Independent Fiduciary, and no 

partnership or corporation of which 

such organization or individual is an 

officer, director, or ten percent (10%) or 

more partner or shareholder, may 

acquire any property from, sell any 

property to, or borrow any funds from 

Midlands or from affiliates of Midlands 

while serving as an Independent 

Fiduciary. This prohibition will 

continue for a period of six months after 

the party ceases to be an Independent 

Fiduciary and/or the Independent 

Fiduciary negotiates any transaction on 

behalf of the Plan during the period that 

the organization or individual serves as 

an Independent Fiduciary. 

(c) The term ‘‘Lawsuits’’ means the 

suit filed by the Plan and Midlands 

against Vantage and its principals, 

Jeffrey and Wendy Richie in Case No.: 

3:17–cv–03459, the bankruptcy claims 

filed against the Chapter 7 Estate of 

Vantage, and the claims filed against 

Matrix Trust, RSM and Cole & Reed, for 

misrepresentation, breach of contract, 

breach of fiduciary duties, violations of 

state law, aiding and abetting, failure to 

supervise, and common law fraud. 

(d) The term ‘‘Midlands’’ includes the 

following entities: (i) Midlands 

Management Corporation, (ii) the CAP 

Shareholders, and (iii) Cap Managers, 

LLC. 

(e) The ‘‘Plan’’ means the Midlands 

Management Corporation 401(k) Plan. 

(f) The term ‘‘Recovery Rights 

Agreement’’ means the written 

agreement under which the Plan agreed 

to transfer its rights to the Assigned 

Interests in exchange for the Restorative 

Payment. 

(g) The term ‘‘Restorative Payment’’ 

means the $8,292,189 payment that was 

remitted to the Plan by Safety National 

as part of Safety National’s acquisition 

of Midlands. 

Section II. Covered Transactions 

If the proposed exemption is granted, 

the restrictions of ERISA Sections 

406(a)(1)(A) and (D) shall not apply to: 

(1) The December 18, 2018 Restorative 

payment of $8,292,189 to the Plan by 

Safety National in exchange for the 

Plan’s assignment to Midlands of the 

Assigned Interests; and (2) the potential 

additional cash payment(s) by Midlands 

to the Plan if the amount(s) Midlands 

receives from the Assigned Interests 

exceeds $8,292,189, provided the 

conditions described below are met. 

Section III. Conditions 

(a) The Restorative Payment and any 

Excess Recovery Amount payment, 

described below, are properly allocated 

to the Plan’s participants’ accounts; 

(b) If Midlands receives more than 

$8,292,189 from the Assigned Interests, 

Midlands must immediately transfer to 

the Plan the Excess Recovery Amount, 

which is the difference between the 

amount of Assigned Interest proceeds 

and $8,292,189. Midlands may reduce 

the Excess Recovery Amount (but not 

the Restorative Payment amount) paid 

to the Plan only by the amount of 

reasonable attorney’s fees that Midlands 

incurred in pursuing the Assigned 

Interests, if the fees were paid to 

unrelated third parties; 

(c) If Midlands receives less than 

$8,292,189 from the Assigned Interests, 

then Midlands must automatically 

forgive any unrecovered shortfall 

amount, with no Plan assets transferred 

to Midlands; 

(d) In connection with its receipt of 

the Restorative Payment, the Plan has 

not and will not release any claims, 

demands and/or causes of action it may 

have against: (1) Any fiduciary of the 

Plan; (2) Midlands; and/or (3) any 

person or entity related to a person or 

entity identified in (1)–(2) of this 

paragraph; 

(e) A qualified, independent fiduciary 

(the Independent Fiduciary), which is 

unrelated to Midlands and/or its 

affiliates and is acting solely on behalf 

of the Plan in full accordance with its 

obligations of prudence and loyalty 

under ERISA sections 404(a)(1)(A) and 

(B): 

(1) Reviewed the terms and 

conditions of the Restorative Payment, 

the Recovery Rights Agreement, the 

proposed exemption and final 

exemption; 

(2) Determined that the Covered 

Transactions were prudent, in the 

interest of, and protective of the Plan 

and its participants and beneficiaries; 

(3) Confirms that the Restorative 

Payment amount was properly made to 

the Plan and appropriately allocated; 

(4) Monitors the Plan’s Assigned 

Interests on an ongoing basis to ensure 

that all recovery amounts due the Plan 

were immediately and properly remitted 

to the Plan; 

(5) Monitors and ensures that legal 

fees paid in connection with the 

Assigned Interests and the Lawsuits are 

limited to reasonable attorney’s fees 

paid to unrelated third parties that 

Midlands incurred in pursuing 

recoveries from the Assigned Interests 

and the Lawsuits; 

(6) Has not entered into any 

agreement or instrument that violates 

ERISA section 410 or Department’s 

Regulations codified at 29 CFR Section 

2509.75–4; 

(f) No party associated with this 

exemption has or will indemnify the 

Independent Fiduciary and the 

Independent Fiduciary will not request 

indemnification from any party 

associated with this exemption, in 

whole or in part, for negligence and/or 

any violation of state or federal law that 

may be attributable to the Independent 

Fiduciary in performing its duties to the 

Plan with respect to the Proposed 

Transactions. In addition, no contract or 

instrument may purport to waive any 

liability under state or federal law for 

any such violation; 

(g) Not later than 90 days after the 

resolution of Midlands’ collection 

efforts with respect to the Assigned 


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13320 Federal Register / Vol. 87, No. 46 / Wednesday, March 9, 2022 / Notices 

9For purposes of this proposed exemption, 

references to the provisions of Title I of ERISA, 

unless otherwise specified, should be read to refer 

as well to the corresponding provisions of Code 

Section 4975. 

10The Summary of Facts and Representations is 

based on the Applicant’s representations and does 

not reflect factual findings or opinions of the 

Department, unless indicated otherwise. The 

Department notes that availability of this 

exemption, if granted, is subject to the express 

condition that the material facts and representations 

contained in application D–12012 are true and 

complete, and accurately describe all material terms 

of the transactions covered by the exemption. If 

there is any material change in a transaction 

covered by the exemption, or in a material fact or 

representation described in the application, the 

exemption will cease to apply as of the date of such 

change. 

Interests, the Independent Fiduciary 

must submit a written statement to the 

Department confirming and 

demonstrating that all of the 

requirements of the exemption have 

been met; 

(h) If an Independent Fiduciary 

resigns, is removed, or is unable to serve 

as an Independent Fiduciary for any 

reason, the Independent Fiduciary must 

be replaced by a successor entity that: 

(1) Meets the definition of Independent 

Fiduciary detailed above in Section 

II(b); and (2) otherwise meets all of the 

qualification, independence, prudence 

and diligence requirements set out in 

this exemption. Further, any such 

successor Independent Fiduciary must 

assume all of the duties of the outgoing 

Independent Fiduciary. As soon as 

possible before the appointment of a 

successor Independent Fiduciary, the 

Applicant must notify the Department’s 

Office of Exemption Determinations of 

the change in Independent Fiduciary 

and such notification must contain all 

material information including the 

qualifications of the successor 

Independent Fiduciary; 

(i) Neither the Independent Fiduciary, 

nor any parties related to the 

Independent Fiduciary, have performed 

any prior work on behalf of Midlands, 

or on behalf of any party related to 

Midlands; 

(j) Neither the Independent Fiduciary, 

nor any parties related to the 

Independent Fiduciary, have any 

financial interest with respect to the 

Independent Fiduciary’s work as 

Independent Fiduciary, apart from the 

express fees and reimbursement for 

reasonable expenses paid to the 

Independent Fiduciary to represent the 

Plan with respect to the Covered 

Transactions that are the subject of this 

exemption; 

(k) Neither the Independent 

Fiduciary, nor any parties related to the 

Independent Fiduciary, have received 

any compensation or entered into any 

financial or compensation arrangements 

with Midlands, or any parties related to 

Midlands; 

(l) The Plan pays no interest in 

connection with the Restorative 

Payment; 

(m) No Plan assets are pledged to 

secure the Restorative Payment; 

(n) The Covered Transactions do not 

involve any risk of loss to either the 

Plan or its participants and 

beneficiaries; 

(o) The Plan has no liability for the 

Restorative Payment, even in the event 

that the amount recovered by Midlands 

with respect to the Assigned Interests is 

less than $8,292,189; 

(p) The Plan does not incur any 

expenses, commissions or transaction 

costs in connection with the Covered 

Transactions and this exemption; 

(q) Midlands may not receive or retain 

any proceeds from the Lawsuits other 

than from the Assigned Interests; 

(r) All terms of the Covered 

Transactions are and will remain at least 

as favorable to the Plan as the terms and 

conditions the Plan could obtain in a 

similar transaction negotiated at arm’slength with unrelated third parties; and 

(s) All of the material facts and 

representations set forth in the 

Summary of Facts and Representation 

are true and accurate. 

Effective Date: If granted, the 

exemption will be in effect as of 

December 18, 2018. 

Notice to Interested Persons 

Those persons who may be interested 

in the publication in the Federal 

Register of the notice of proposed 

exemption (the Notice) include 

participants and beneficiaries of the 

Plan. The Applicant will provide 

notification to interested persons, and to 

representatives of all the parties to the 

litigation described above, by electronic 

mail and first-class mail within fifteen 

(15) calendar days of the date of the 

publication of the Notice in the Federal 

Register. The mailing will include a 

copy of the Notice, as it appears in the 

Federal Register on the date of 

publication, plus a copy of the 

Supplemental Statement, as required, 

pursuant to 29 CFR 2570.43(b)(2), which 

will advise interested persons of their 

right to comment and/or to request a 

hearing. 

The Department must receive all 

written comments and requests for a 

hearing no later than forty-five (45) 

calendar days from the date of the 

publication of the Notice in the Federal 

Register. 

All comments will be made available 

to the public. 

Warning: Do not include any 

personally identifiable information 

(such as a name, address, Social 

Security number, or other contact 

information) or confidential business 

information that you do not want 

publicly disclosed. All comments may 

be posted on the internet and can be 

retrieved by most internet search 

engines. 

Further Information Contact: Mr. 

Joseph Brennan of the Department, 

telephone (202) 693–8456. (This is not 

a toll-free number.) 

The DISH Network Corporation 401(k) 

Plan and the EchoStar 401(k) Plan 

Located in Englewood, CO 

[Application No. D–12012] 

Proposed Exemption 

The Department is considering 

granting an exemption under the 

authority of section 408(a) of the 

Employee Retirement Income Security 

Act of 1974, as amended (ERISA) and 

section 4975(c)(2) of the Internal 

Revenue Code of 1986, as amended (the 

Code), and in accordance with the 

procedures set forth in 29 CFR part 

2570, subpart B (76 FR 66637, 66644, 

October 27, 2011). The proposed 

exemption would permit the acquisition 

and holding by the DISH Network 

Corporation 401(k) Plan (the DISH Plan) 

and the EchoStar 401(k) Plan (the 

EchoStar Plan) of subscription rights 

that were issued on November 26, 2019, 

by the DISH Network Corporation (DISH 

or the Applicant), a party in interest 

with respect to the Plans.9

Summary of Facts and 

Representations 10

The Parties 

1. DISH and EchoStar. DISH is a livelinear television programming provider. 

Charles W. Ergen is the Chairman and 

controlling shareholder of DISH. In 

addition, Mr. Ergen beneficially owns 

greater than 50% of the total combined 

voting power of EchoStar Corporation 

(EchoStar). EchoStar is a global provider 

of satellite communications solutions. 

2. The DISH Plan. The DISH Plan is 

a defined contribution 401(k) plan, with 

$683,135,811.95 in total assets and 

18,936 participants, as of November 25, 

2019. In the past, DISH made 

discretionary employer profit sharing 

contributions to the DISH Plan, in the 

form of DISH common stock. The DISH 

common stock (DISH Stock) is held 

within a DISH Stock fund (the DISH 

Stock Fund) in the DISH Plan. Each 


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11According to the Applicant, DISH has no other 

classes of stock with outstanding shares. DISH’s 

certificate of incorporation authorizes the issuance 

of Class C shares and preferred shares of stock in 

addition to Class A and Class B shares, but there 

are no outstanding shares of Class C common stock 

or preferred stock. 

12The Applicant represents that the closing price 

of DISH Stock on November 21, 2019 was $35.91. 

13The Applicant represents that if Holder A sold 

shares of Class A DISH common stock on November 

24 to Holder B, who retained the shares through the 

end of the Offering, then Holder B would receive 

the Rights. Holder A would not receive Rights 

because it sold the shares before the Ex-Date for the 

Offering. 

14According to the Applicant, the term ‘‘whenissued’’ refers to transactions involving securities 

that have been announced but not yet issued. The 

transactions only settle after the security has been 

issued. The Applicant also states that ‘‘regular-way’’ 

trading is conducted on the normal timeframe for 

purchases and sales of securities on an exchange. 

participant eligible to receive a 

discretionary profit-sharing contribution 

under the terms of the DISH Plan is 

allocated a balance in the DISH Stock 

Fund when the contribution is made. As 

of November 25, 2019, the DISH Plan 

held 3,333,185.696 shares of Class A 

DISH common stock, with a fair market 

value of $118,261,428.49, representing 

approximately 1.3% of DISH’s 

254,626,165 outstanding shares of Class 

A common stock. 

3. The EchoStar Plan. The EchoStar 

Plan is a defined contribution 401(k) 

Plan, with $496,363,649.64 in total 

assets and 2,572 participants, as of 

November 25, 2019. As of that same 

date, the EchoStar Plan held 

167,634.586 shares of Class A DISH 

common stock within the DISH Stock 

Fund of the EchoStar Plan, with a fair 

market value of $5,938,915.24. The 

DISH Stock held by the EchoStar Plan, 

represented approximately 0.03% of 

DISH’s 254,626,165 outstanding shares 

of Class A common stock. 

The Rights Offering 

4. On November 7, 2019, DISH 

announced its intent to conduct a rights 

offering (the Offering), for general 

corporate purposes, including 

investments in DISH’s wireless 

business. Under the Offering, all holders 

of record of DISH’s Class A and B 

common stock and outstanding 

convertible notes (as of November 17, 

2019 (the Record Date)), would 

automatically receive certain rights (the 

Rights), at no charge. Specifically, each 

holder would receive one (1) Right for 

every 18.475 shares of DISH Class A or 

B common stock, or Class A common 

stock equivalent (as applicable). 11

Fractional Rights were not issued. If an 

eligible holder would have received a 

fractional Right, DISH rounded down to 

the nearest whole number. 

5. A total of 29,834,992 Rights to 

purchase 29,834,992 Class A shares of 

DISH common stock were issued in the 

Offering. Each Right entitled the holder 

to purchase one share of DISH’s Class A 

Common Stock for $33.52 per whole 

share of Class A Common Stock.12

Rights could only be exercised in 

aggregate for whole numbers of shares of 

DISH’s Class A Common Stock. DISH 

did not include an oversubscription 

offer to purchase additional shares of 

Class A Common Stock that may have 

remained unsubscribed as a result of 

any unexercised Rights after the 

expiration of the Offering. 

6. On November 22, 2019, DISH 

distributed the Rights to registered 

holders of eligible securities. According 

to the Applicant, the National 

Association of Securities Dealer 

Automated Quotation system 

(NASDAQ) determined that shares of 

DISH Class A common stock would 

continue to trade with the right to 

receive the Rights until November 25, 

2019 (the Ex-Date).13

7. The Applicant states that all 

eligible holders held the Rights until the 

Rights expired, were exercised, or were 

sold. A holder had the right to exercise 

some, all, or none of its Rights. The 

Rights could be exercised commencing 

on November 22, 2019, and elections to 

exercise the Rights had to be received by 

the subscription agent (Computershare 

Trust Company, N.A.) by 5:00 p.m., 

Eastern Time, on December 9, 2019. All 

exercises of the Rights by Rights holders 

were irrevocable. 

8. The Rights were transferable, and 

they began to trade on the NASDAQ 

Global Select Market on a ‘‘whenissued’’ basis under the symbol 

‘‘DISHV’’ beginning on November 22, 

2019, and on a ‘‘regular way’’ basis 

under the symbol ‘‘DISHR’’ beginning 

on November 25, 2019, the Ex-Date.14

The Rights continued to trade until the 

trading deadline at the close of business 

on December 9, 2019. According to data 

reported by FactSet, the volumeweighted average price was $0.33 per 

Right, based on the sale of 15,237,856 

Rights during the trading period. 

9. The Applicant represents that 

approximately 81% of the 29,834,992 

Rights to purchase 29,834,992 Class A 

shares of DISH common stock issued in 

the Offering were exercised and all 

shareholders of DISH and EchoStar, 

including the Plans, were treated 

exactly the same. In addition, the 

Applicant represents that DISH received 

gross proceeds of approximately $1 

billion from the Offering, and DISH 

used or will use these proceeds for 

general corporate purposes. 

10. The Applicant represents that 

each Plan was amended to: (a) Allow for 

the temporary acquisition and holding 

of the Rights, pending their orderly 

disposition; (b) confirm that participants 

were not entitled to direct the holding, 

exercise, sale or other disposition of the 

Rights; and (c) authorize the designated 

independent fiduciary to exercise 

discretionary authority with respect to 

the holding, exercise, sale or other 

disposition of the Rights. 

11. The DISH Plan received 180,084 

Rights in connection with the Offering, 

and the EchoStar Plan received 9,073 

rights in connection with the Offering. 

All decisions regarding the holding and 

disposition of the Rights by each Plan 

were made in accordance with the Plan 

provisions, by a qualified independent 

fiduciary acting solely in the interest of 

Plan participants. 

The Independent Fiduciary 

12. Under the terms of an agreement, 

dated November 15, 2019 (the 

Independent Fiduciary Agreement), the 

DISH Plan’s 401(k) Committee and the 

Investment Committee for the EchoStar 

Plan, appointed Newport Trust 

Company (Newport) to act as the 

independent fiduciary (the Independent 

Fiduciary) on behalf of the Plans, in 

connection with the Offering and with 

respect to the subject exemption 

request. Newport’s responsibilities 

included determining whether and 

when to exercise or sell each Right held 

by the DISH Plan and the EchoStar Plan. 

13. Newport is a New Hampshire 

state-chartered trust company with $90 

billion in assets under management and 

administration as of September 30, 

2019. Newport represents that it 

understands and acknowledges its 

duties and responsibilities under ERISA 

in acting as a fiduciary on behalf of the 

Plans in connection with the Offering. 

14. Further, Newport represents that it 

is independent of and unrelated to DISH 

and EchoStar, and that it has not 

directly or indirectly received any 

compensation or other consideration for 

its own account in connection with the 

Offering, except for compensation from 

DISH in accordance with and for 

performing services described in the 

Independent Fiduciary Agreement. 

Newport represents that the revenue it 

has received (or expected to receive) did 

not exceed 1% of its 2018 annual 

revenue. 

15. Newport was chosen to act as 

Independent Fiduciary by the 401(k) 

Committee with respect to the DISH 

Network Corporation 401(k) Plan, and 

the 401(k) Investment Committee for the 

EchoStar 401(k) Plan with respect to the 

EchoStar 401(k) Plan (the Committees), 


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15ERISA Section 410 provides, in part, that 

‘‘except as provided in ERISA Sections 405(b)(1) 

and 405(d), any provision in an agreement or 

instrument which purports to relieve a fiduciary 

from responsibility or liability for any 

responsibility, obligation, or duty under this part 

[meaning ERISA Section 410(a)] shall be void as 

against public policy.’’ 

the Plan fiduciaries responsible for 

making such decisions. According to the 

Committees, Newport’s selection was 

based solely on its qualifications to 

serve as an independent fiduciary after 

a prudent process, and without regard to 

whether Newport’s views were likely to 

favor the interests of DISH Network and 

EchoStar, or related parties. 

Newport represents that: (a) Neither it 

nor any related parties have performed 

any work in connection with the Rights 

Offering on behalf of the DISH Network 

and/or its related parties; (b) it does not 

have any financial interest with respect 

to the work as the Independent 

Fiduciary for the Rights Offering, apart 

from its express fees for work as the 

Independent Fiduciary for the Plans; (c) 

neither it nor any related parties have 

received any compensation or entered 

into any financial or compensation 

arrangements with the DISH Network 

and related parties; and (d) it has not 

entered into any agreement or 

instrument regarding the Rights Offering 

that violates ERISA Section 410 or the 

Department’s regulations at 29 CFR 

Section 2509.75–4.15 Newport also 

represents that it has not been 

indemnified, in whole or in part for 

negligence of any kind, or for any 

violation of state or federal law in 

performing its duties and 

responsibilities to the Plans under the 

terms of the requested exemption, and 

that there is no cap or limitation on its 

liability for negligence of any kind in 

performing its duties as the independent 

fiduciary for the Plans. 

16. As stated in Newport’s 

independent fiduciary report, dated 

January 10, 2020 (the Independent 

Fiduciary Report), Newport conducted a 

due diligence process in evaluating the 

Offering on behalf of the Plans. This 

process included discussions and 

correspondence with representatives of 

the Plans, DISH, DISH’s counsel, and 

representatives of the Plans’ trustees of 

the Plans, that enabled Newport to 

better understand a number of 

important elements related to the 

Offering. Newport also reviewed 

publicly-available information and 

information provided by DISH. 

17. With regard to the Offering, 

Newport represents that it considered 

four options on behalf of the Plans: (a) 

To continue holding the Rights within 

the DISH Stock Funds in the Plans; (b) 

to exercise all of the Rights to acquire 

DISH Stock; (c) to sell all of the Rights 

on the NASDAQ Global Select Market at 

the prevailing market price; or (d) to sell 

a portion of the Rights and use the 

proceeds to exercise the remaining 

Rights to purchase Class A shares of 

DISH common stock. 

18. Newport represents that although 

it considered the advantages and 

disadvantages of these options, it 

determined that selling some of the 

Rights and exercising other Rights 

would expose the Plans to significant 

risk and uncertainty. Newport also 

determined that the process of 

exercising the Rights would have taken 

several days, during which the market 

price of the Rights and DISH Stock 

could have declined to a level below the 

$33.52 exercise price for the Rights. 

Therefore, Newport elected not to sell 

some of the Rights and exercise others. 

19. Further, Newport represents that it 

could not exercise all of the Rights 

because, as with any participantdirected individual account plan, the 

Plans did not maintain significant pools 

of uninvested cash that could be used to 

purchase the additional shares of DISH 

Stock. Exercising all of the Rights, 

according to Newport, would have 

required the liquidation of other 

investments held within participant 

accounts to generate cash necessary for 

the purchase of the additional DISH 

Stock. Doing so, according to Newport, 

would have been: (a) Inconsistent with 

the provisions of the Plans calling for 

individually-directed investment of 

participant accounts; and (b) a timeconsuming process that would have 

taken several days and exposed the 

Plans to the same risks and 

uncertainties that selling some of the 

Rights and exercising others would have 

imposed. 

20. Newport represents that it 

ultimately decided to sell the Rights to 

capture their value quickly and then to 

redeploy the proceeds into the 

participants’ accounts. Newport 

represents that although the Plans 

would incur some transaction costs 

through this option ($0.005 per Right 

traded), selling the Rights would be 

prudent given that the Plans did not 

have sufficient cash to exercise the 

Rights and the other options carried too 

many risks. Therefore, Newport 

concluded that selling the Rights was in 

the interests of the Plans and the Plans’ 

participants and beneficiaries, and 

protective of the rights of the 

participants and beneficiaries of the 

Plans. 

Sale of the Rights 

21. According to the Applicant, 

Fidelity informed Newport at 10:20 a.m. 

on November 26, 2019, that the Rights 

were available for trading. Newport sold 

the EchoStar Plan’s 9,073 Rights in 

‘‘blind transactions’’ on the NASDAQ 

Global Select Market on November 26, 

2019, and realized an average selling 

price of $1.43 per Right. 

22. Because of the amount of Rights 

the DISH Plan received, Newport 

directed the sale of the DISH Plan’s 

Rights over the course of three days to 

avoid negatively impacting the market 

price of the Rights through sale activity. 

For the DISH Plan, Newport directed: (a) 

The sale of 17,110 Rights on November 

26, 2019, at an average sale price of 

$1.41; (b) the sale of 122,799 Rights on 

November 27, 2019, at an average price 

of $1.25; and (c) the sale of 40,175 

Rights on November 29, 2019, at an 

average price of $0.72. According to the 

Applicant, each of the DISH Plan’s sales 

was conducted in blind transactions on 

the NASDAQ Global Select Market. 

23. The Applicant represents that no 

brokerage fees, commissions, 

subscription fees, or other charges were 

paid by the Plans with respect to the 

acquisition and holding of the Rights. 

With respect to the sale of the Rights, 

the DISH Plan paid $900.42 in 

commissions and $4.29 in SEC fees, and 

the EchoStar Plan paid $45.37 in 

brokerage commissions and $0.27 in 

SEC fees. 

24. The Applicant represents that the 

total net proceeds generated in 

connection with the sale of the Rights 

was $205,319.79 for the DISH Plan, and 

$12,930.57 for the EchoStar Plan. 

According to the Applicant, the 

proceeds were invested in accordance 

with participants’ elections for the 

investment of their contributions to the 

Plans, or to the extent the participants 

had not made investment elections, in 

the Plans’ default investment vehicles. 

ERISA Analysis 

25. ERISA Section 406(a)(1)(E) 

provides that a fiduciary with respect to 

a plan shall not cause the plan to engage 

in a transaction if he or she knows or 

should know that such transaction 

constitutes the acquisition, on behalf of 

the plan, of any employer security in 

violation of ERISA Section 407(a). 

ERISA Section 407(a)(1)(A) provides 

that a plan may not acquire or hold any 

‘‘employer security’’ which is not a 

‘‘qualifying employer security.’’ Under 

ERISA Section 407(d)(1), ‘‘employer 

securities’’ are defined, in relevant part, 

as securities issued by an employer of 

employees covered by the plan, or by an 


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affiliate of the employer. ERISA Section 

407(d)(5) provides, in relevant part, that 

‘‘qualifying employer securities’’ are 

stock or marketable obligations. ERISA 

Section 406(a)(2) provides that a 

fiduciary of a plan shall not permit the 

plan to hold any employer security if he 

or she knows or should know that 

holding such security violates ERISA 

Section 407(a). 

26. The Applicant represents that the 

Rights would not be considered 

‘‘qualifying’’ employer securities 

because they are not stock, marketable 

obligations, or interests in a publiclytraded partnership. Therefore, the 

Applicant requests retroactive 

exemptive relief from ERISA Sections 

406(a)(1)(E), 406(a)(2), and 407(a)(1)(A) 

for the acquisition and holding of the 

Rights by the Plan in connection with 

the Rights Offering. 

Statutory Findings 

27. Based on the conditions that are 

included in this proposed exemption, 

the Department has tentatively 

determined that the relief sought by the 

Applicant would satisfy the statutory 

requirements for an exemption under 

ERISA Section 408(a). 

a. The Proposed Exemption Is 

‘‘Administratively Feasible.’’ The 

Department has tentatively determined 

that the proposed exemption is 

administratively feasible since, among 

other things, a qualified independent 

fiduciary, Newport, must represent the 

Plans for all purposes with respect to 

the acquisition, holding and sale of the 

Rights, and documented its findings in 

a written report to the Department. The 

Department notes that, under the terms 

of this proposed exemption, Newport 

may not be indemnified, in whole or in 

part, for an act of negligence by Newport 

in performing its duties and 

responsibilities to the Plans. 

b. The Proposed Exemption Is ‘‘In the 

Interests of the Plan.’’ The Department 

has tentatively determined that the 

proposed exemption is in the interests 

of the participants and beneficiaries of 

the Plans since, among other things: (a) 

The Rights were automatically issued to 

all holders of Class A and B DISH 

common stock (and holders of 

convertible notes convertible to Class A 

DISH common stock) as of the Ex- Date, 

including the Plans; and (b) the Plans 

held and disposed the Rights, and 

realized their fair market value in blind 

transactions on the open market. 

c. The Proposed Exemption Is 

‘‘Protective of the Plan.’’ The 

Department has tentatively determined 

that the proposed exemption is 

protective of the rights of participants 

and beneficiaries since, among other 

things: (a) The acquisition and holding 

of the Rights occurred as a result of the 

Rights Offering which was approved by 

the DISH Board of Directors, in which 

all shareholders of DISH and EchoStar, 

including their Plans, were treated 

exactly the same; (b) the acquisition of 

the Rights by the Plans occurred on the 

same terms available to other eligible 

holders of DISH Stock and convertible 

notes, and the Plans received the same 

proportionate number of Rights as such 

other eligible holders; (c) the Plans did 

not pay any fees or commissions in 

connection with the acquisition or 

holding of the Rights; (d) all decisions 

regarding the holding and disposition of 

the Rights by the Plans were made, in 

accordance with the provisions of the 

Plans, by Newport, the Independent 

Fiduciary, which concluded that the 

sales were in the interest of the Plans 

and their participants; and (e) Newport 

concluded that the Plans’ holdings and 

participant accounts had increased. In 

this regard, net of brokerage and SEC 

fees, the DISH Plan received 

$205,319.79 and the EchoStar Plan 

$12,930.57, for a total of $218,250.36 

between the Plans. 

Summary 

30. Based on the conditions that are 

included in this proposed exemption, 

the Department has tentatively 

determined that the relief sought by the 

Applicant would satisfy the statutory 

requirements for an exemption under 

ERISA Section 408(a). 

Proposed Exemption 

Section I. Covered Transactions 

If the proposed exemption is granted, 

the restrictions imposed by ERISA 

section 406(a)(1)(A), 406(a)(1)(E), 

406(a)(2), and 407(a)(1)(A), and Code 

sections 4975(c)(l)(A) and (E), by reason 

of section 4975(c)(1) of the Code, will 

not apply to the past acquisition and 

holding by the Plans of certain 

subscription rights (the Rights) that 

were issued by the DISH Network 

Corporation (DISH or the Applicant) to 

the individually-directed accounts of 

participants in the DISH Network 

Corporation 401(k) Plan (the DISH Plan) 

and the EchoStar 401(k) Plan (the 

EchoStar Plan; together, the Plans) 

during a rights offering (the Rights 

Offering) that occurred from November 

26–29, 2019, provided that the 

conditions described in Section II below 

have been met. 

Section II. Conditions 

(a) The Plans acquired the Rights as 

a result of an independent act of DISH 

as a corporate entity, and without any 

participation on the part of the Plans; 

(b) The acquisition and holding of the 

Rights occurred as a result of a rights 

offering approved by the DISH board of 

directors, in which all shareholders of 

DISH, including the Plans, were treated 

exactly the same; 

(c) The acquisition of the Rights by 

the Plans occurred on the same terms 

made available to other eligible holders 

of DISH Stock and convertible notes, 

and the Plans received the same 

proportionate number of Rights as such 

other eligible holders; 

(d) The Plans did not pay any fees or 

commission in connection with the 

acquisition or holding of the Rights. The 

Plans paid commissions and SEC fees to 

third parties solely in connection with 

the sale of the Rights; 

(e) All decisions regarding the holding 

and disposition of the Rights by the 

Plans were made, in accordance with 

the provisions of the Plans, by Newport, 

acting solely in the interest of the 

participants of the Plans as the qualified 

independent fiduciary (the Independent 

Fiduciary); 

(f) As the Independent Fiduciary, 

Newport: 

(1) Has not been indemnified, in 

whole or in part, for negligence of any 

kind or for any violation of state or 

federal law in performing its duties and 

responsibilities to the Plans under the 

terms of this proposed exemption, and 

there is no cap or limitation on its 

liability for negligence of any kind in 

performing its duties as the Independent 

Fiduciary for the Plans; 

(2) Has not entered into any 

agreement or instrument that violates 

ERISA Section 410 or the DOL’s 

regulations at 29 CFR Section 2509.75– 

4; and 

(3) Has acknowledged that there is no 

instrument or contractual arrangement 

that purports to waive or release it from 

liability for any violation of state or 

federal law; and 

(g) All the facts and representations 

set forth in the Summary of Facts and 

Representations are true and accurate. 

Effective Date: The proposed 

exemption, if granted, will be in effect 

from November 26, 2019, the date that 

the Plans received the Rights, until 

November 29, 2019, the last date the 

Rights were sold by the Plans on the 

NASDAQ Global Select Market. 

Notice to Interested Persons 

Notice of the proposed exemption (the 

Notice) will be given to all interested 

persons within 15 days of the date of 

publication of the Notice in the Federal 

Register, by first class U.S. mail to the 

last known address of all such 


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16For purposes of this proposed exemption, 

references to the provisions of Title I of ERISA, 

unless otherwise specified, should be read to refer 

as well to the corresponding provisions of Code 

Section 4975. Further, this proposed exemption, if 

granted, does not provide relief from the 

requirements of, or specific sections of, any law not 

noted above. Accordingly, the Applicant is 

responsible for ensuring compliance with any other 

laws applicable to this transaction. 

17The Summary of Facts and Representations is 

based on the Applicant’s representations provided 

in its exemption application and does not reflect 

factual findings or opinions of the Department, 

unless indicated otherwise. The Department notes 

that availability of this exemption, if granted, is 

subject to the express condition that the material 

facts and representations contained in Application 

D–12048 are true and complete, and accurately 

describe all material terms of the transactions 

covered by the exemption. If there is any material 

change in a transaction covered by the exemption, 

or in a material fact or representation described in 

the application, the exemption will cease to apply 

as of the date of such change. 

18As referenced below, Varde VIP represents the 

illiquid ‘‘side pocket’’ portion of an original hedge 

fund investment. 

19The Department notes that a fiduciary to a plan 

must not rely upon or otherwise depend upon the 

participation of the plan in a particular investment 

in order for the fiduciary (or persons in which the 

fiduciary has an interest) to undertake, or to 

continue, his or her share in the same investment. 

individuals. It will contain a copy of the 

Notice, as published in the Federal 

Register, and a supplemental statement, 

as required pursuant to 29 CFR 

2570.43(a)(2). The supplemental 

statement will inform interested persons 

of their right to comment on the 

pending exemption. Written comments 

are due within 45 days of the 

publication of the Notice in the Federal 

Register. All comments will be made 

available to the public. 

Warning: Do not include any 

personally identifiable information 

(such as name, address, or other contact 

information) or confidential business 

information that you do not want 

publicly disclosed. All comments may 

be posted on the internet and can be 

retrieved by most internet search 

engines. 

Further Information Contact: Blessed 

Chuksorji-Keefe of the Department, 

telephone (202) 693–8567. (This is not 

a toll-free number.) 

The Children’s Hospital of Philadelphia 

Pension Plan for Union-Represented 

Employees 

Located in Philadelphia, PA 

[Application No. D–12048] 

Proposed Exemption 

The Department is considering 

granting an exemption under the 

authority of Section 408(a) of the 

Employee Retirement Income Security 

Act of 1974, as amended (ERISA) and 

Section 4975(c)(2) of the Internal 

Revenue Code of 1986, as amended (the 

Code), and in accordance with the 

procedures set forth in 29 CFR part 

2570, subpart B (76 FR 46637, 66644, 

October 27, 2011).16 This proposed 

exemption permits the sale (the Sale) of 

certain illiquid private fund interests 

(the Interests) by the Children’s Hospital 

of Philadelphia Pension Plan for UnionRepresented Employees (the Plan or the 

Applicant) to the Children’s Hospital of 

Philadelphia Foundation, provided 

certain conditions are met. 

Summary of Facts and 

Representations 17

Background 

1. The Children’s Hospital of 

Philadelphia (CHOP) is a hospital 

devoted exclusively to the care of 

children, with its primary campus 

located in Philadelphia, Pennsylvania. 

The Children’s Hospital of Philadelphia 

Foundation (the Foundation) is the 

parent entity of CHOP and supports the 

activities of CHOP through fund-raising 

and endowment-management. CHOP 

and the Foundation are both 

Pennsylvania nonprofit corporations 

and Code Section 50l(c)(3) charitable 

organizations. They are separate legal 

entities but are related because the 

members of the Board of Trustees of 

each entity (together, the Boards of 

Trustees, and individually the CHOP 

Board and the Foundation Board) are 

comprised of the same individuals who 

meet and often act jointly. 

2. The Plan is a noncontributory 

defined benefit plan that covers 

employees under a collective bargaining 

agreement between CHOP and the 

National Union of Hospital and Health 

Care Employees, AFSCME, AFL–CIO 

District 1199C. As of August 31, 2021, 

the Plan covered 1,636 participants and 

held $102,000,000 in total assets. 

3. The Plan is administered by the 

Members of the Administrative 

Committee of the Children’s Hospital of 

Philadelphia (the Committee). The 

Committee is comprised of nine 

individual members who concurrently 

serve as officers and employees of 

CHOP. The Committee has 

responsibility for the operation and 

administration of the Plan, determines 

the appropriateness of the Plan’s 

investment offerings, and monitors the 

Plan’s investment performance. 

The Interests 

4. The Interests that are proposed to 

be sold consist of private fund limited 

partnership interests and one illiquid 

‘‘side pocket’’ portion of an original 

hedge fund investment.18 The Interests 

consist of 18 funds that are spread 

among 14 managers and have varying 

durations, ranging from ‘‘currently in 

liquidation’’ to December 2022. The 18 

Funds can be further broken down into 

24 Fund Vehicles. The Plan’s 

investment duration in the Interests 

ranges from 7–18 years. As of December 

31, 2019, the Interests represented 

approximately 8.5% of the Plan’s assets. 

The Foundation also currently is 

invested in all of the same Interests, 

except for the Adams Street Interests.19

The following table provides a 

complete list of the Interests, including 

the fair market value of each Interest, as 

of May 21, 2021: 

Interest FMV 

Adams Street U.S. Fund .......... $990,321 

Adams Street Non U.S. Fund .. 440,058 

Adams Street Direct Fund ........ 275,554 

Charterhouse IX ....................... 130,737 

FORTRESS CREDIT OPPS .... 123,933 

FORTRESS CREDIT OPPS II 344,955 

Hellman & Friedman VII ........... 136,119 

H&F Shield ............................... 0.00 

H&F Willis AV III ....................... 0.00 

H&F Wand AIV III ..................... 35,218 

H&F EFS AIV III ....................... 36,381 

IDG–ACCEL CHINA CAP ........ 771,450 

IDG ACCEL CHINA II ............... 601,354 

IDG–ACCEL CHINA GRTH FD 

III ........................................... 757,027 

NORDIC CAPITAL VII .............. 5,781 

SANKATY COPS IV ................. 16,899 

SIGULER GUFF BRIC II .......... 218,477 

VARDE X .................................. 202,691 

ENERGY CAPITAL PARTNERS II–B ............................. 42,297 

BEP LEGACY C ....................... 4,404 

LIME ROCK RESOURCES ...... 0.00 

LIQUID REALTY PARTNERS 

IV TOTAL .............................. 38,559 

METROPOLITAN REAL ESTATE PARTNERS GLOBAL 45,034 

VARDE INVESTMENT PARTNERS (VIP) ........................... 549,790 

The Interests include investments in 

private equity funds, real estate funds, 

and natural resource funds. The 

Applicant represents that the Plan 

invested in the Interests because each 

Interest provided significant riskadjusted rate of return potential and 

appropriate investment diversification. 

As noted in the chart, it is possible 

that three of the twenty-four Interests 

will be appraised as having no value. 

However, this proposed exemption 

requires the Independent Fiduciary to 

separately consider the likelihood that 

one or more of these three Interests will 

receive trailing distributions, and to 

attribute a positive value as appropriate. 

The Independent Fiduciary’s analysis 

regarding whether or not any positive 

value is attributable to each of these 

three Interests must be included in the 

Independent Fiduciary’s written report 

to the Department, as described below. 


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20At the time of the Prior Exemption Request, the 

Plan and the Non-Union Plan were related entities. 

In this regard, the two Plans shared the same plan 

sponsor (CHOP) and were administered by the 

Committee. 

21PTE 80–26, as amended at 71 FR 17917, April 

7, 2006, allows a party in interest to make an 

interest-free loan to a plan if the proceeds of the 

loan are used for the payment of the plan’s ordinary 

operating expenses, including the payment of 

benefits, or for a purpose incidental to the ordinary 

operation of the plan. In addition, the loan must be 

unsecured and not made by an employee benefit 

plan. The Department expresses no opinion herein 

on whether the Loan satisfies the requirements of 

PTE 80–26. 

Prior Exemption Request 

5. On October 1, 2018, the Plan, along 

with the Children’s Hospital of 

Philadelphia Pension Account Plan (the 

Non-Union Plan) 20 submitted a request 

for exemptive relief that was 

substantially similar to the relief 

requested herein (the Prior Exemption 

Request). At the time the Prior 

Exemption Request was filed, the Board 

of Trustees had recently approved the 

termination of the Non-Union Plan. In 

connection with its planned 

termination, the Non-Union Plan sought 

to liquidate its noncash assets, 

including the Interests, as a means to 

increase liquidity and fund lump sum 

payments and annuity purchases for 

participants. At the time that the Prior 

Exemption Request was filed, the assets 

of the Plan and the Union Plan were 

both held in the Master Trust, where 

each Plan held a proportional 

ownership stake in the Interests. 

The Department’s Denial of the Prior 

Exemption Request 

6. In a letter dated August 25, 2020, 

the Department denied the Prior 

Exemption Request (the Denial Letter). 

As stated in the Denial Letter, the 

Department was not able to find that the 

Prior Exemption request was in the 

interest of, and protective of, the 

participants and beneficiaries of the 

Plan and the Non-Union Plan. In this 

regard, the Denial Letter noted that the 

independent fiduciary, acting on behalf 

of the Plan and the Non-Union Plan, 

had engaged an independent appraiser 

pursuant to an agreement that limited 

the appraiser’s liability for acts of 

negligence. The Denial Letter further 

stated that the appraiser’s insistence on 

limiting its responsibility for negligent 

work, and the independent fiduciary’s 

acceptance of this limitation, raised 

concerns regarding whether sufficient 

protections were in place to warrant the 

requested exemption. 

7. In the context of a prohibited 

transaction exemption, the Department 

expects independent fiduciaries to 

exercise special care when hiring an 

appraiser to value hard-to-value assets, 

and those appraisers to perform their 

work in accordance with expert 

standards and without special releases 

from liability for work that fails to 

adhere to those standards. Adequate 

protection for the plan in this context 

requires an appraiser and its work 

product to adhere to a high standard of 

care, diligence, and accuracy. Liability 

releases and work limitations that fail to 

meet these standards do not support an 

expectation of competent services and 

the protection of plan participants and 

beneficiaries. Therefore, the 

independent fiduciary’s decision to hire 

an expert that is unwilling to stand 

behind its work calls into question the 

prudence of the independent fiduciary’s 

hiring decision, reduces the reliability 

of the appraisal report, and negates the 

purpose of requiring an independent 

appraisal of the subject assets. 

New Exemption Request 

8. On May 28, 2021, the Plan filed 

another exemption request, citing 

material developments that had 

occurred since the Department’s Denial 

of the Prior Exemption Request. To 

address the issues raised in the 

Department’s Denial Letter, Newport 

Trust Company (Newport), in its role as 

the qualified independent fiduciary (the 

Independent Fiduciary), engaged a new 

qualified independent appraiser, SB 

Advisors LLC (SB Advisors or the 

Independent Appraiser). The Applicant 

represents that Newport’s engagement of 

SB Advisors is not subject to any 

provision that limits SB Advisor’s 

liability for any acts of negligence, as 

more fully described below. The 

Applicant further notes that the NonUnion Plan no longer requires an 

exemption because it has been 

terminated and liquidated. Therefore, 

the exemption is now sought only by 

the Plan. 

Loan to Master Trust 

9. The Applicant states that, after the 

termination of the Non-Union Plan, the 

Foundation loaned $12 million to the 

Master Trust (the Loan). The Loan 

permitted the Master Trust to pay 

certain expenses, including expenses for 

the payment of ordinary operating 

expenses of the Plan, such as the 

purchase of annuity contracts for the 

benefit of Plan Participants, the lump 

sum payment of benefits to participants, 

and expenses incidental to the same. 

10. The Applicant represents that the 

Loan is intended to comply with the 

applicable provisions of ERISA, 

including PTE 80–26, and the Code.21

Among other things, the Foundation 

made the Loan without interest and 

without the Master Trust providing any 

security for the Loan. The Committee 

and the Foundation intend the Master 

Trust to repay the Loan as soon as 

reasonably possible after either the 

Foundation submits a written request 

for repayment or the exemption is 

granted and the Plan sells the Interests 

to the Foundation. 

Proposed Sale of the Interests and 

ERISA Analysis 

11. The requested exemption would 

permit the Plan to sell the Interests to 

the Foundation. ERISA Section 

406(a)(1)(A) prohibits a plan fiduciary 

from causing a plan to engage in a 

transaction if the fiduciary knows or 

should know that such transaction 

constitutes a direct or indirect sale of 

any property between a plan and a party 

in interest. The Foundation is a party in 

interest with respect to the Plan under 

ERISA Section 3(14)(G) because it is an 

entity that has a 50% or greater 

ownership interest in CHOP, the Plan’s 

Sponsor. ERISA Section 406(a)(1)(D) 

prohibits a plan fiduciary from causing 

a plan to engage in a transaction if the 

fiduciary knows or should know that 

such transaction constitutes a direct or 

indirect transfer to, or use by or for the 

benefit of, a party in interest, of any 

assets of the plan. The Committee is a 

party in interest with respect to the Plan 

under ERISA Section 3(14)(A) because it 

is a fiduciary to the Plan. 

12. ERISA Section 406(b)(1) prohibits 

a plan fiduciary from dealing with the 

assets of the plan in his or her own 

interest or for his or her own account. 

ERISA Section 406(b)(2) prohibits a plan 

fiduciary, in his or her individual or in 

any other capacity, from acting in any 

transaction involving the plan on behalf 

of a party whose interests are adverse to 

the interests of the plan or the interests 

of its participants or beneficiaries. 

13. The Sale by the Plan of the 

Interests to the Foundation would 

violate ERISA Section 406(b)(1) and 

406(b)(2). The Committee shares 

common individuals with the 

Foundation’s Investment Office, and the 

Foundation’s Investment Office is 

responsible for approving the 

Foundation’s purchase of the Interests 

from the Plan. Moreover, the CHOP 

Board and the Foundation Board are 

comprised of the same individuals. The 

CHOP Board may have residual 

authority over the Committee’s decision, 

as a fiduciary, to sell the Interests on 

behalf of the Plan. Similarly, the 

Foundation’s Board may have residual 

authority over the Foundation’s 

decision to purchase the Interests from 

the Plan. 


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22ERISA Section 410 provides, in part, that 

‘‘except as provided in ERISA Sections 405(b)(1) 

and 405(d), any provision in an agreement or 

instrument which purports to relieve a fiduciary 

from responsibility or liability for any 

responsibility, obligation, or duty under this part 

[meaning ERISA Section 410(a)] shall be void as 

against public policy.’’ 

The Qualified Independent Fiduciary 

14. The Committee retained Newport 

of New York, NY to serve as the Plans’ 

Independent Fiduciary. The Committee 

represents that it selected and engaged 

Newport based solely on Newport’s 

qualifications to serve as Independent 

Fiduciary after a prudent process, and 

that the Committee made the selection 

without regard to whether Newport’s 

views were likely to favor the interests 

of CHOP, the Foundation, or any parties 

related to CHOP or the Foundation. The 

Committee represents that it selected 

Newport following a robust Request for 

Proposal (RFP) process, because of 

Newport’s qualifications, including its 

significant history of serving as 

independent fiduciary in past 

transactions and positive references. 

15. Newport represents that it 

possesses the appropriate technical 

training and proficiency with Title I of 

ERISA to serve as the Plan’s 

Independent Fiduciary, and that it has 

the specific experience necessary to 

evaluate the Sale of the Interests on 

behalf of the Plan. Newport represents 

that it understands, acknowledges, and 

accepts its duties and responsibilities 

under ERISA in acting as Independent 

Fiduciary on behalf of the Plan, and that 

it is required to act solely in the interest 

of the Plan’s participants and 

beneficiaries while exercising care, skill, 

and prudence in discharging its duties. 

16. Newport represents that it is 

independent of, does not control, is not 

controlled by, and is unrelated to any 

parties in interest to the Sale, and that 

it will not directly or indirectly receive 

any compensation or other 

consideration in connection with the 

Sale, except for compensation for 

performing Independent Fiduciary 

services on behalf of the Plan. Newport 

also represents that the sum of its 

annual compensation received pursuant 

to its engagement as Independent 

Fiduciary, and from parties in interest 

with respect to the Plan and affiliates of 

CHOP and/or the Foundation, would 

not exceed two percent (2%) of 

Newport’s annual gross revenues. 

Newport further represents that the 

receipt of its fee is not contingent upon, 

nor in any way affected by, Newport’s 

ultimate decisions on behalf of the Plan 

in connection with the Sale. 

17. Newport represents: (a) That no 

party related to CHOP or the Foundation 

has, or will, indemnify Newport in 

whole or in part for negligence and/or 

for any violation of state or federal law 

that may be attributable to Newport in 

performing its duties as Independent 

Fiduciary on behalf of the Plan; (b) that 

it has not performed any prior work on 

behalf of CHOP or the Foundation, or on 

behalf of any party related to CHOP or 

the Foundation; (c) that it has no 

financial interest with respect to its 

work as Independent Fiduciary, apart 

from the express fees paid to Newport 

to represent the Plan with respect to the 

Sale; (d) that it has not received any 

compensation or entered into any 

financial or compensation arrangements 

with CHOP or the Foundation, or any 

parties related to CHOP or the 

Foundation; and (e) that it will not enter 

into any agreement or instrument 

regarding the Sale that violates ERISA 

Section 410 or the Department’s 

regulations at 29 CFR Section 2509.75– 

4.22

18. As Independent Fiduciary, 

Newport is responsible for: (a) 

Representing the Plan’s interests for all 

purposes with respect to the Sale; (b) 

determining that the Sale is in the 

interests of, and protective of, the Plan 

and the participants of the Plan; (c) 

reviewing and approving the terms and 

conditions of the Sale; (d) 

independently and prudently selecting 

and engaging the Independent 

Appraiser (described below) to value the 

Interests for the purposes of the Sale; (e) 

reviewing the Independent Appraisal 

Report, confirming that the underlying 

methodology is reasonable and accurate, 

and confirming that the Independent 

Appraiser has reasonably determined 

the fair market valuation of the Interests 

in accordance with professional 

standards; (f) ensuring that the 

independent appraiser renders an 

updated fair market valuation of the 

Interests as of the date of the Sale that 

includes a separate assessment 

regarding the likelihood that any 

Interest reported as having no value will 

receive trailing distributions, and the 

extent to which that likelihood affects 

the Interest’s value; and (g) determining 

whether it is prudent for the Plan to 

proceed with the Sale. Additionally, not 

later than 90 days after the Sale is 

completed, the Independent Fiduciary 

must submit a written statement to the 

Department demonstrating that the Sale 

has met all the requirements of this 

exemption, which are described below. 

The Qualified Independent Appraiser 

19. On January 15, 2021, Newport 

engaged SB Advisors to appraise the 

Interests for purposes of the Sale. 

Newport represents that it: (a) Prudently 

selected SB Advisors to appraise the 

Interests on behalf of the Plan; (b) 

ensured SB Advisor’s independence 

from CHOP, the Foundation, and any 

other related parties; and (c) confirmed 

that all information given to SB 

Advisors was complete, current, and 

accurate. 

20. SB Advisors represents that it is 

independent of, and unrelated to, any 

party in interest to the Plan and that its 

revenues for 2021 from parties in 

interest and affiliates in connection with 

its engagement as Independent 

Appraiser would be less than two 

percent (2%) of its projected revenues 

for 2021. SB Advisors represents that it 

is qualified to serve as Independent 

Appraiser for purposes of the Sale, 

because of its comprehensive valuation 

experience specifically related to the 

valuation of alternative and illiquid 

investments for which there are no 

‘‘active market’’ quotations. SB Advisors 

states that its principals have performed 

in-depth valuation analyses of various 

alternative and illiquid asset types, 

including limited partnership interests 

in private funds, intangible assets, direct 

loans, private debt securities, and 

preferred stock and common stock. 

Finally, SB Advisors represents that its 

principals have been retained to value 

limited partnership interests in funds 

for ERISA plans over the course of the 

past five years. 

21. In connection with its engagement 

as Independent Appraiser, SB Advisors 

represents that: (a) No party related to 

this exemption request has, or will, 

indemnify SB Advisors in whole or in 

part for negligence and/or for any 

violation of state or federal law that may 

be attributable to SB Advisors in 

performing its duties as Independent 

Appraiser on behalf of the Plan; (b) no 

contract or instrument that SB Advisors 

enters into with respect to the 

transactions that are the subject of the 

exemption purports to waive any 

liability under state or federal law for 

any such violation by SB Advisors; (c) 

neither SB Advisors, nor any parties 

related to SB Advisors, have performed 

any prior work on behalf of CHOP or the 

Foundation, or on behalf of any party 

related to CHOP or the Foundation; (d) 

neither SB Advisors, nor any parties 

related to SB Advisors, have any 

financial interest with respect to SB 

Advisors’ work as Independent 

Appraiser, apart from the express fees 

paid to SB Advisors to value the 

Interests; and (e) neither SB Advisors, 

nor any parties related to SB Advisors, 

have received any compensation or 

entered into any financial or 

compensation arrangements with CHOP 


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or the Foundation, or any parties related 

to CHOP or the Foundation. 

The Independent Appraisal Report 

22. In the Independent Appraisal 

Report, dated May 14, 2021, SB 

Advisors concludes that the Interests 

have a fair market value of $5,793,018, 

and a book value of $7,907,091. SB 

Advisors represents that it performed its 

appraisal of the Interests by gathering 

information about the Interests, 

reviewing each general partnership’s 

valuation policy, determining the book 

value by subtracting distributions from 

the net asset value (NAV) and applying 

a price to NAV multiple to each of the 

Interests based on indicative secondary 

market pricing and comparable publicly 

traded funds. SB Advisors represents 

that it reviewed: (a) LPA and/or LLC 

agreements; (b) the private placement 

memorandum; (c) unaudited quarterly 

reports and financial statements; (d) 

general partner reports regarding capital 

accounts and holdings; (e) distribution 

notices; and (f) other internal 

documents relating to formation, 

history, current operations, and 

probable future outlook. 

23. SB Advisors represents that it 

utilized two appraisal approaches: (a) 

Secondary market pricing indications; 

and (b) selected public funds price to 

NAV analysis. SB Advisors represents 

that it considered and eliminated other 

approaches deemed to be either 

unreliable or irrelevant based on the 

available information, including the 

income approach, market approach, and 

cost approach. 

24. In addition to completing the 

Independent Appraisal Report described 

above, SB Advisors will issue a final 

Independent Appraisal Report to 

coincide with the date of the Sale. 

The Independent Fiduciary Report 

25. In the Independent Fiduciary 

Report, dated May 26, 2021, Newport 

concludes that the Sale is in the interest 

and protective of the Plan because it 

provides for immediate liquidity, 

favorable pricing, and the elimination of 

future cash liabilities. To reach its 

conclusions, Newport represents that it 

conducted a thorough and prudent 

process that involved numerous 

discussions and correspondence with 

personnel from the Committee, the 

Independent Appraiser, and its 

advisors. 

26. In the Independent Fiduciary 

Report, Newport concludes that SB 

Advisors’ valuation methodology is 

consistent with sound valuation 

principles. Newport also concludes that, 

in accordance with fiduciary standards, 

it was reasonable to rely upon SB 

Advisor’s Appraisal under the 

circumstances. 

27. Newport states that SB Advisors 

applied its valuation methodology in a 

consistent and objective manner and 

exercised professional judgment to 

account for the specific characteristics 

of each of the Interests. In Newport’s 

view, SB Advisor’s employed 

reasonable underlying assumptions and 

market observations based on relevant 

third-party research. 

28. To ensure that SB Advisors 

properly applied its appraisal 

methodology, Newport represents that 

it: (a) Reviewed the qualitative 

description of the methodology against 

calculations reflected in various tables 

included in the Appraisal Report; (b) 

confirmed that the concluded price to 

NAV multiple of each Interest was 

consistent with price to NAV figures 

stated in other areas of the Appraisal 

Report; (c) recalculated the concluded 

price to NAV multiple for the Interests 

based on the price to NAV results from 

both of the valuation techniques 

outlined in the Appraisal Report; (d) 

assessed the reasonableness of the 

underlying assumptions; (e) reviewed 

public fund pricing reports and 

calculations utilized by the Independent 

Appraiser; (f) confirmed that the 

discount to NAV for each of the 

Interests was appropriately determined; 

and (g) reviewed secondary market 

pricing reports. 

29. Newport states that the Sale is 

favorable to the Plan because it provides 

immediate liquidity, favorable pricing, 

and eliminates future cash liabilities. 

Newport states that an all-cash 

transaction is in the interest of the Plan 

and its participants because it provides 

liquidity for the Plan to immediately 

reinvest in other assets that are aligned 

with the Plan’s investment policy 

statement. Newport further states that 

the Plan will sell the Interests to the 

Foundation for their fair market value. 

The Plan will not be responsible for any 

commissions, fees, or other expenses 

associated with the Sale and will not 

bear any costs associated with the 

exemption request, including the 

professional fees of outside counsel, the 

Independent Fiduciary, and the 

Independent Appraiser, which amount 

to at least $315,000. Newport notes that 

transaction commission and other fees 

can be significant, ranging between 

$125,000 and $165,000, and would 

otherwise have reduced the net 

proceeds received by the Plan in any 

sale to an unrelated third party. 

30. Newport states the Sale, in and of 

itself, does not constitute an agreement, 

arrangement, or understanding designed 

to benefit the Foundation, and that its 

analysis does not suggest that the 

Interests have significant upside that 

would be forfeited by the Plan because 

of the Sale. 

31. Based on its analysis, Newport 

states that it has determined that the 

terms and conditions of the Sale are fair 

to the Plan and are no less favorable 

than terms the Plan would receive 

through arm’s-length negotiations with 

an unrelated third party. Newport states 

that the terms and conditions of the Sale 

are in the interest of, and protective of, 

the participants and beneficiaries of the 

Plan. Therefore, Newport has 

determined that it is prudent to proceed 

with the Sale. Finally, within 90 days 

after the Sale is completed, Newport 

will submit a written report to the 

Department demonstrating that each 

exemption condition has been met. 

Other Conditions of the Proposed 

Exemption 

32. The Plan will receive cash for 

each Interest based on the fair market 

value of the Interests as of the date of 

the Sale based upon an appraisal report 

prepared by the Independent Appraiser. 

The terms and conditions of the Sale 

will be no less favorable to the Plan than 

the terms the Plan would have received 

under similar circumstances in an 

arm’s-length transaction with an 

unrelated third party. Further, the 

Foundation will assume any remaining 

capital commitments in connection with 

the Interests, and the Plan will pay no 

commissions, fees, or other expenses in 

connection with the Sale. The 

Foundation will obtain written consent 

from each Fund manager to purchase 

the Interests from the Plan prior to 

engaging in the Sale of the Interests. 

Statutory Findings 

33. ERISA Section 408(a) provides, in 

part, that the Department may not grant 

an exemption unless the Department 

finds that the exemption is 

administratively feasible, in the interest 

of affected plans and of their 

participants and beneficiaries, and 

protective of the rights of such 

participants and beneficiaries. Each of 

these criteria are discussed below. 

34. The Proposed Exemption Is 

‘‘Administratively Feasible.’’ The 

Department has tentatively determined 

that the Sale is administratively feasible 

because, among other things, an 

Independent Fiduciary will represent 

the interests of the Plan for all purposes 

with respect to the Sale and ensure that 

the Interests are sold for their full fair 

market value as of the date of the sale. 

35. The Proposed Exemption Is ‘‘In 

the Interests of the Plan.’’ The 

Department has tentatively determined 


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13328 Federal Register / Vol. 87, No. 46 / Wednesday, March 9, 2022 / Notices 

that the proposed exemption is in the 

interest of the Plan. Among other things, 

the Sale would enable the Plan to sell 

an illiquid asset at its full fair market 

value for cash, which will provide 

added liquidity for the Plan. 

36. The Proposed Exemption Is 

‘‘Protective of the Plan.’’ The 

Department has tentatively determined 

that the proposed exemption is 

protective of the rights of the Plans’ 

participants and beneficiaries. Among 

other things, Newport, as Independent 

Fiduciary, must prudently represent the 

Plan’s interests for all purposes with 

respect to the Sale, and must ensure that 

the protective conditions that are 

mandated under this exemption are met. 

In addition, not later than 90 days after 

the Sale is completed, Newport must 

submit a written statement to the 

Department demonstrating that the Sale 

has met all of the exemption conditions. 

Summary 

34. Based on the conditions that are 

included in this proposed exemption, 

the Department has tentatively 

determined that it can find that the 

relief sought by the Applicant would 

satisfy the statutory requirements for the 

Department to grant an administrative 

exemption under ERISA Section 408(a). 

Proposed Exemption 

Section I. Proposed Transactions 

If the proposed exemption is granted, 

the restrictions of ERISA Sections 

406(a)(1)(A) and (D), and 406(b)(1) and 

(b)(2), and the sanctions resulting from 

the application of Code Section 4975, by 

reason of Code Sections 4975(c)(1)(A), 

(D) and (E), shall not apply to the Sale 

of the Interests by the Plan to the 

Foundation, provided the conditions set 

forth in Section II are met. 

Section II. Conditions 

(a) The Sale of each Interest is a onetime transaction for cash; 

(b) The terms and conditions of the 

Sale are at least as favorable to the Plan 

as those the Plan could obtain in an 

arm’s-length transaction with an 

unrelated third party; 

(c) The Sale price for each Interest 

will be the fair market value of the 

Interest as of the date of the Sale, as 

determined by the Independent 

Fiduciary, based upon an updated 

Independent Appraisal Report prepared 

by the Independent Appraiser that 

values the Interest as of the date of the 

Sale; 

(d) The Foundation assumes any 

remaining capital commitments in 

connection with the Interests; 

(e) The Plan pays no commissions, 

fees, or other expenses in connection 

with the Sale; 

(f) The Independent Fiduciary: 

(1) Represents the Plan’s interests for 

all purposes with respect to the Sale; 

(2) Determines that the Sale is in the 

interests of, and protective of, the Plan 

and the participants of the Plan; 

(3) Reviews and approves the terms 

and conditions of the Sale; 

(4) Independently and prudently 

engages the Independent Appraiser for 

the Sale; 

(5) Reviews the Independent 

Appraisal Report, confirms that the 

underlying methodology is reasonable 

and accurate, and confirms that the 

Independent Appraiser has reasonably 

determined the fair market valuation of 

the Interests in accordance with 

professional standards; 

(6) Ensures that the Independent 

Appraiser renders an updated fair 

market valuation of the Interests as of 

the date of the Sale. The updated market 

valuation must include a separate 

assessment as to the likelihood that any 

Interest reported as having no value may 

nonetheless receive trailing 

distributions. The Independent 

Appraiser must consider this likelihood 

when valuing any Interest, and address 

the extent to which this likelihood 

affects the Interest’s value; 

(7) Determines whether it is prudent 

for the Plan to proceed with the Sale; 

(8) Has not and will not enter into any 

agreement or instrument that violates 

ERISA Section 410; 

(9) Confirms that each condition of 

the exemption has been met; and 

(10) Submits a written report to the 

Department not later than 90 days after 

the Sale has been completed 

demonstrating that each exemption 

condition has been met. The written 

report must include the Independent 

Fiduciary’s determinations regarding 

whether any Interest is likely to receive 

trailing distributions, and the extent to 

which to any anticipated trailing 

distributions increased the Interest’s 

value. 

(g) The Plan does not bear the costs 

of: (1) The exemption application; (2) 

obtaining the exemption; (3) the 

Independent Fiduciary; or (4) the 

Independent Appraiser; 

(h) The Foundation receives written 

consent from each Fund manager to 

purchase the Interests from the Plan 

prior to engaging in the Sale of the 

respective Interests; 

(i) The Sale is not part of an 

agreement, arrangement, or 

understanding designed to benefit 

CHOP or the Foundation; and 

(j) All the material facts and 

representations set forth in the 

Summary of Facts and Representations 

are true and accurate. 

Effective Date: If granted, the 

exemption will in effect as of the date 

the grant notice is published in the 

Federal Register. 

Notice to Interested Persons 

Those persons who may be interested 

in the publication in the Federal 

Register of the Notice include 

participants in the Plans who are 

actively employed by CHOP or another 

employer participating in the Plans, 

participants in the Plans who are no 

longer actively employed by CHOP or 

other employers that have participated 

in a Plan, and Plan beneficiaries in pay 

status. The Applicant will provide 

notification to interested persons by 

electronic mail and first-class mail 

within fifteen (15) calendar days of the 

date of the publication of the Notice in 

the Federal Register. The mailing will 

contain a copy of the Notice, as it 

appears in the Federal Register on the 

date of publication, plus a copy of the 

Supplemental Statement, as required, 

pursuant to 29 CFR 2570.43(b)(2), which 

will advise such interested persons of 

their right to comment and to request a 

hearing. 

The Department must receive all 

written comments and requests for a 

hearing no later than forty-five (45) days 

from the date of the publication of the 

Notice in the Federal Register. 

All comments will be made available 

to the public. 

Warning: Do not include any 

personally identifiable information 

(such as name, address, or other contact 

information) or confidential business 

information that you do not want 

publicly disclosed. All comments may 

be posted on the internet and can be 

retrieved by most internet search 

engines. 

Further Information Contact: Mr. 

Joseph Brennan of the Department, 

telephone (202) 693–8456. (This is not 

a toll-free number.) 

General Information 

The attention of interested persons is 

directed to the following: 

(1) The fact that a transaction is the 

subject of an exemption under section 

408(a) of the Act and/or section 

4975(c)(2) of the Code does not relieve 

a fiduciary or other party in interest or 

disqualified person from certain other 

provisions of the Act and/or the Code, 

including any prohibited transaction 

provisions to which the exemption does 

not apply and the general fiduciary 

responsibility provisions of section 404 


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Federal Register / Vol. 87, No. 46 / Wednesday, March 9, 2022 / Notices 13329 

of the Act, which, among other things, 

require a fiduciary to discharge his 

duties respecting the plan solely in the 

interest of the participants and 

beneficiaries of the plan and in a 

prudent fashion in accordance with 

section 404(a)(1)(B) of the Act; nor does 

it affect the requirement of section 

401(a) of the Code that the plan must 

operate for the exclusive benefit of the 

employees of the employer maintaining 

the plan and their beneficiaries; 

(2) Before an exemption may be 

granted under section 408(a) of the Act 

and/or section 4975(c)(2) of the Code, 

the Department must find that the 

exemption is administratively feasible, 

in the interests of the plan and of its 

participants and beneficiaries, and 

protective of the rights of participants 

and beneficiaries of the plan; 

(3) The proposed exemptions, if 

granted, will be supplemental to, and 

not in derogation of, any other 

provisions of the Act and/or the Code, 

including statutory or administrative 

exemptions and transitional rules. 

Furthermore, the fact that a transaction 

is subject to an administrative or 

statutory exemption is not dispositive of 

whether the transaction is in fact a 

prohibited transaction; and 

(4) The proposed exemptions, if 

granted, will be subject to the express 

condition that the material facts and 

representations contained in each 

application are true and complete, and 

that each application accurately 

describes all material terms of the 

transaction which is the subject of the 

exemption. 

Signed at Washington, DC, this 3rd day of 

March 2022. 

George Christopher Cosby, 

Acting Director, Office of Exemption 

Determinations, Employee Benefits Security 

Administration, U.S. Department of Labor. 

[FR Doc. 2022–04954 Filed 3–8–22; 8:45 am] 

BILLING CODE 4510–29–P 

DEPARTMENT OF LABOR 

Employment and Training 

Administration 

Agency Information Collection 

Activities; Comment Request 

ACTION: Notice. 

SUMMARY: The Department of Labor’s 

(DOL) Employment and Training 

Administration (ETA) is soliciting 

comments concerning a proposed 

extension for the authority to conduct 

the information collection request (ICR) 

titled, ‘‘National Dislocated Workers 

Emergency Grant Application and 

Reporting Procedures.’’ This comment 

request is part of continuing 

Departmental efforts to reduce 

paperwork and respondent burden in 

accordance with the Paperwork 

Reduction Act of 1995 (PRA). 

DATES: Consideration will be given to all 

written comments received by May 9, 

2022. 

ADDRESSES: A copy of this ICR with 

applicable supporting documentation, 

including a description of the likely 

respondents, proposed frequency of 

response, and estimated total burden, 

may be obtained free by contacting 

Ingrid Schonfield by telephone at 202– 

693–0269 (this is not a toll-free 

number), TTY 1–877–889–5627 (this is 

not a toll-free number), or by email at 

schonfield.ingrid.n@dol.gov. 

Instructions: Submit written 

comments about, or requests for a copy 

of, this ICR by mail or courier to the 

U.S. Department of Labor, Employment 

and Training Administration, Office of 

Workforce Investment, 200 Constitution 

Avenue NW, Washington, DC 20210; by 

email: schonfield.ingrid.n@dol.gov; or 

by fax 202–693–3817. To ensure proper 

consideration, include the Office of 

Management and Budget (OMB) control 

number 1205–0439. 

Comments Under the PRA: In 

addition to filing comments with the 

Department, interested parties may 

submit comments concerning this ICR to 

OMB’s Office of Information and 

Regulatory Affairs (OIRA) at https://

www.reginfo.gov/public/do/PRAMain. 

Find the relevant information collection 

by selecting ‘‘Currently under Review— 

Open for Public Comments’’ or by using 

the search function. 

FOR FURTHER INFORMATION CONTACT: 

Contact Ingrid Schonfield by telephone 

at 202–693–0269 (this is not a toll-free 

number) or by email at 

schonfield.ingrid.n@dol.gov. 

SUPPLEMENTARY INFORMATION: National 

Dislocated Worker Grants (NDWGs) are 

discretionary grants awarded by the 

Secretary of Labor under Section 170 of 

the Workforce Innovation and 

Opportunity Act (WIOA). NDWGs 

provide states and other eligible 

applicants resources to respond to large, 

unexpected layoff events causing 

significant job losses. NDWG funds 

temporarily expand state, regional, and 

local workforce system capacity to serve 

dislocated workers, meet the increased 

demand for WIOA employment and 

training services, quickly reemploy laidoff workers, and enhance their 

employability and earnings. The NDWG 

legacy application and modification 

forms (ETA–9103, ETA–9105, ETA– 

9106, and ETA–9107) include project 

planning, employer, project summary, 

and project operator information. These 

legacy forms and application processes 

constitute the information collection 

request. ETA expects these forms to 

sunset shortly as all NDWG applications 

shift to the grants.gov application 

process associated with a different 

information collection. 

DOL, as part of continuing efforts to 

reduce paperwork and respondent 

burden, conducts a pre-clearance 

consultation program to provide the 

general public and Federal agencies an 

opportunity to comment on proposed 

and/or continuing collections of 

information before submitting them to 

the OMB for final approval. This public 

comment process helps to ensure 

requested data can be provided in the 

desired format; reporting burden (time 

and financial resources) is minimized; 

collection instruments are clearly 

understood, and the impact of collection 

requirements can be properly assessed. 

This information collection is subject 

to the PRA. A Federal agency generally 

cannot conduct or sponsor a collection 

of information, and the public is 

generally not required to respond to an 

information collection unless it is 

approved by OMB under the PRA and 

displays a currently valid OMB Control 

Number. In addition, notwithstanding 

any other provisions of law, no person 

shall generally be subject to penalty for 

failing to comply with a collection of 

information that does not display a 

valid Control Number. See 5 CFR 

1320.5(a) and 1320.6. 

Interested parties are encouraged to 

provide comments to the contact shown 

in the ADDRESSES section. Comments 

must be written to receive 

consideration, and they will be 

summarized and included in the request 

for OMB approval of the final ICR. To 

help ensure appropriate consideration, 

comments should mention OMB control 

number 1205–0439. 

Submitted comments will also be a 

matter of public record for this ICR and 

posted on the internet, without 

redaction. DOL encourages commenters 

not to include personally identifiable 

information, confidential business data, 

or other sensitive statements/ 

information in any comments. 

DOL is particularly interested in 

comments that: 

• Evaluate whether the proposed 

collection of information is necessary 

for the proper performance of the 

functions of the agency, including 

whether the information will have 

practical utility; 

• Evaluate the accuracy of the 

Agency’s estimate of the burden of the 

proposed collection of information, 


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