103D CONGRESS
1ST SESSION
H. R. 617
AN ACT
To amend the Securities Exchange Act of 1934 to protect
investors in limited partnerships in rollup transactions,
and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Limited Partnership
Rollup Reform Act of 1993’’.
SEC. 2. REVISION OF PROXY SOLICITATION RULES WITH
RESPECT TO LIMITED PARTNERSHIP ROLLUP
TRANSACTIONS.
(a) AMENDMENT.—Section 14 of the Securities Ex-
change Act of 1934 (15 U.S.C. 78n) is amended by adding
at the end the following new subsection:
‘‘(h) PROXY SOLICITATIONS AND TENDER OFFERS
IN CONNECTION WITH LIMITED PARTNERSHIP ROLLUP
TRANSACTIONS.—
‘‘(1) PROXY RULES TO CONTAIN SPECIAL PRO-
VISIONS.—It shall be unlawful for any person to so-
licit any proxy, consent, or authorization concerning
a limited partnership rollup transaction, or to make
any tender offer in furtherance of a limited partner-
ship rollup transaction, unless such transaction is
conducted in accordance with rules prescribed by the
Commission under subsections (a) and (d) as re-
quired by this subsection. Such rules shall—
‘‘(A) permit any holder of a security that
is the subject of the proposed limited partner-
ship rollup transaction to engage in preliminary
communications for the purposes of determining
whether to solicit proxies, consents, or author-
izations in opposition to the proposed trans-
action, without regard to whether any such
communication would otherwise be considered a
solicitation of proxies, and without being re-
quired to file soliciting material with the Com-
mission prior to making that determination, ex-
cept that nothing in this subparagraph shall be
construed to limit the application of any provi-
sion of this title prohibiting, or reasonably de-
signed to prevent, fraudulent, deceptive, or ma-
nipulative acts or practices under this title;
‘‘(B) require the issuer to provide to hold-
ers of the securities that are the subject of the
transaction such list of the holders of the issu-
er’s securities as the Commission may deter-
mine in such form and subject to such terms
and conditions as the Commission may specify;
‘‘(C) prohibit compensating any person so-
liciting proxies, consents, or authorizations di-
rectly from security holders concerning such a
transaction—
‘‘(i) on the basis of whether the solic-
ited proxies, consents, or authorizations ei-
ther approve or disapprove the proposed
transaction; or
‘‘(ii) contingent on the transaction’s
approval, disapproval, or completion;
‘‘(D) set forth disclosure requirements for
soliciting material distributed in connection
with a limited partnership rollup transaction,
including requirements for clear, concise, and
comprehensible disclosure with respect to—
‘‘(i) any changes in the business plan,
voting rights, form of ownership interest or
the general partner’s compensation in the
proposed limited partnership rollup trans-
action from each of the original limited
partnerships;
‘‘(ii) the conflicts of interest, if any, of
the general partner;
‘‘(iii) whether it is expected that there
will be a significant difference between the
exchange values of the limited partnerships
and the trading price of the securities to
be issued in the limited partnership rollup
transaction;
‘‘(iv) the valuation of the limited part-
nerships and the method used to determine
the value of limited partners’ interests to
be exchanged for the securities in the lim-
ited partnership rollup transaction;
‘‘(v) the differing risks and effects of
the transaction for investors in different
limited partnerships proposed to be in-
cluded, and the risks and effects of com-
pleting the transaction with less than all
limited partnerships;
‘‘(vi) a statement by the general part-
ner as to whether the proposed limited
partnership rollup transaction is fair or
unfair to investors in each limited partner-
ship, a discussion of the basis for that con-
clusion, and the general partner’s evalua-
tion, and a description of alternatives to
the limited partnership rollup transaction,
such as liquidation; and
‘‘(vii) such other matters deemed nec-
essary or appropriate by the Commission.
‘‘(E) provide that such soliciting materials
contain or be accompanied by an opinion on the
fairness of the proposed transaction to holders
of each security which is subject to the pro-
posed transaction that—
‘‘(i) includes such information, rep-
resentations, and undertakings with re-
spect to the analysis of the transaction,
scope of review, preparation of the opinion,
and basis for and methods of arriving at
conclusions as the Commission may require
in such rules; and
‘‘(ii) is prepared by a person—
‘‘(I) who does not receive any
compensation that is contingent on
the transaction’s approval or comple-
tion;
‘‘(II) who meets such additional
standards of independence from the
person or persons proposing the rollup
transaction as shall be required in the
rules prescribed by the Commission;
‘‘(III) who has been given access
by the issuer to its personnel and
premises and relevant books and
records; and
‘‘(IV) who has represented to
have undertaken an independent anal-
ysis of the fairness of the proposed
rollup transaction to holders based
upon 
the 
information 
obtained
through such access and upon other
independently obtained information;
‘‘(F) require that the soliciting material in-
clude a clear and concise summary of the lim-
ited partnership rollup transaction (including a
summary of the matters referred to in clauses
(i) through (vi) of subparagraph (D) and a
summary of the matter referred to in subpara-
graph (E)), with the risks of the limited part-
nership rollup transaction set forth prominently
in the forepart thereof;
‘‘(G) provide that any solicitation or offer-
ing period with respect to any proxy solicita-
tion, tender offer, or information statement in
a limited partnership rollup transaction shall be
for not less than the lesser of 60 calendar days
or the maximum number of days permitted
under applicable State law; and
‘‘(H) contain such other provisions as the
Commission determines to be necessary or ap-
propriate for the protection of investors in lim-
ited partnership rollup transactions.
‘‘(2) EXEMPTIONS.—The Commission may, con-
sistent with the public interest, the protection of in-
vestors, and the purposes of this Act, exempt by rule
or order any security or class of securities, any
transaction or class of transactions, or any person or
class of persons, in whole or in part, conditionally or
unconditionally, from the requirements imposed pur-
suant to paragraph (1) or from the definition con-
tained in paragraph (4).
‘‘(3) EFFECT
ON
COMMISSION
AUTHORITY.—
Nothing in this subsection limits the authority of the
Commission under subsection (a) or (d) or any other
provision of this title or precludes the Commission
from imposing, under subsection (a) or (d) or any
other provision of this title, a remedy or procedure
required to be imposed under this subsection.
‘‘(4) DEFINITION
OF
LIMITED
PARTNERSHIP
ROLLUP TRANSACTION.—As used in this subsection,
the term ‘limited partnership rollup transaction’
means, except as provided in paragraph (5), a trans-
action involving—
‘‘(A) the combination or reorganization of
limited partnerships, directly or indirectly, in
which some or all investors in the limited part-
nerships receive new securities or securities in
another entity, other than a transaction—
‘‘(i) in which—
‘‘(I) the investors’ limited part-
nership securities are reported under
a transaction reporting plan declared
effective before January 1, 1991, by
the Commission under section 11A;
and
‘‘(II) the investors receive new
securities or securities in another en-
tity that are reported under a trans-
action reporting plan declared effec-
tive before January 1, 1991, by the
Commission under section 11A;
‘‘(ii) involving only issuers that are
not required to register or report under
section 12 both before and after the trans-
action;
‘‘(iii) in which the securities to be is-
sued or exchanged are not required to be
and are not registered under the Securities
Act of 1933;
‘‘(iv) which will result in no signifi-
cant adverse change to investors in any of
the limited partnerships with respect to
voting rights, the term of existence of the
entity, management compensation, or in-
vestment objectives; or
‘‘(v) where each investor is provided
an option to receive or retain a security
under substantially the same terms and
conditions as the original issue; or
‘‘(B) the reorganization of a single limited
partnership in which some or all investors in
the limited partnership receive new securities or
securities in another entity, and—
‘‘(i) transactions in the security issued
are reported under a transaction reporting
plan declared effective before January 1,
1991, by the Commission under section
11A;
‘‘(ii) the investors’ limited partnership
securities are not reported under a trans-
action reporting plan declared effective be-
fore January 1, 1991, by the Commission
under section 11A;
‘‘(iii) the issuer is required to register
or report under section 12, both before and
after the transaction, or the securities to
be issued or exchanged are required to be
or are registered under the Securities Act
of 1933;
‘‘(iv) there are significant adverse
changes to security holders in voting
rights, the term of existence of the entity,