Question
From: (redacted)
Sent: Monday, August 11, 2003 5:36 PM
To: Verne, Michael
Subject: Follow-Up Regarding General Partners and Control
Mr. Verne,
Thanks for the voicemail confirming that being a general partner alone does not constitute "control" for purposes of HSR analysis. Per your voicemail (and also pursuant to Ex. 2 under the definition of "control" under section 801.1(b)), it appears that the only test applicable to a statutory limited partnership is whether a person has the right to 50% of the profits or 50% of assets upon dissolution. If I have misunderstood or misstated your position, please let me know.
In addition, I have a couple follow-up questions:
(1) Does it change the analysis above if the limited partners do not have the ability to remove the general partner? I'm definitely not trying to create a filing obligation, but just want to make sure you have all the facts. Staff comment No)
(2) A is the 10% general partner and B is the 90% limited partner of ABC Limited Partnership. A is the 10% general partner and C is the 90% limited partner of XYZ Limited Partnership. A, B and C are not related parties. ABC LP acquires $45 million of voting securities of a private company (meeting size of persons test). A couple years later, XYZ LP (in a completely separate transaction) acquires $45 million of voting securities of the same private company.
(a) Please confirm that nobody would have a filing obligation (assuming no assets or securities are previously owned) (i.e. B and C would each be considered to acquire an amount not meeting the filing threshold and A being general partner of each partnership would not affect the analysis). (Staff comment - Agree)
(b) If A is an investment manager and basically lines up B and C as investors in this private company (but does nothing more and there is no agreement that the two partnerships will act in concert, other than the fact that A will vote the securities held by each partnership), does that change anything?(Staff comment No)
Please let me know if you have any questions. Thanks again for all your help.