Question
January 6, 2003
Ms. Alice Villavicencio
Compliance Specialist
Pre-Merger Notification Office
Room 301
Bureau of Competition -
Federal Trade Commission
600 Pennsylvania Avenue N.W.
Washington, DC 20580
Dear Alice:
This letter confirms our analysis of our premerger filing obligations under the Hart-Scott-Rodino Act (the "HSR Act").
The transactions in question involve the acquisition of partnership interests. We understand the FTC's Pre-Merger Notification Office's position to be that a sale of partnership interests does not constitute a sale of assets or voting securities under the HSR Act unless 100% of the partnership interests are being acquired by one ultimate parent entity. Based on this understanding, we believe that the transactions contemplated by our clients do not give rise to a reporting obligation under the HSR Act.
The parties to the transaction are: (i) Natural Person A, (ii) Trust B, (iii) Trust C, (iv) Natural Person W, (v) LLC X, (vi) L.P. Y and (vii) L.P. Z. The facts of the proposed acquisition are as follows.
Natural Person A is the ultimate parent entity of Trust B. Natural Person A is the trustee of Trust C. However, Trust C is an irrevocable trust with no reversionary interests, and Natural Person A has no present beneficial. interest, nor any reversionary interest, in trust C. Therefore, it is our understanding that Natural Person A and Trust C are separate ultimate parent entities under the HSR Act.
Natural Person W is the sole owner of LLC X. Natural Person W owns a 99% partnership interest in L.P. Y, LLC X owns a 1 % partnership interest in L.P. Y, LLC X owns a .01% partnership interest in L.P. Z, L.P. Y owns a 99.99% partnership interest in L.P. Z.
Natural Person A, Trust B and Trust C will each acquire a portion of the partnership interests of L.P. Y from Natural Person W and LLC X. Together, Natural Person A, Trust B and Trust C will acquire all of the partnership interests of L.P. Y.
One or more of Natural Person A, Trust B and/or Trust C will acquire LLC X's partnership interest in L.P. Z. L.P. Y will not transfer its interest in L.P. Z.
Under these facts, we believe that none of the transactions described above gives rise to a reporting obligation under the HSR Act in accordance with the amended Control Rule 801.1(b). If you disagree, please let me know at your earliest opportunity. You can reach me at (redacted). If I am not available, you may also speak with (redacted). Thank you or your continued assistance with this issue.
Very truly yours,