Question
v
February 17, 2004
VIA E-MAIL TO mverne@ftc.gov
B. Michael Verne
Premerger Notification Office,
Bureau of Competition
Federal Trade Commission
6 Ih & Pennsylvania Avenue, NW, Room 303
Washington, D.C. 20580
DearMr. Verne:
I am writing to youconcerning the application of the filing requirements of the Hart- Scott-RodinoAntitrust Improvements Act of 1976, as amended, 15 U.S.C. 18a, to aproposed transaction involving a limited partnership. My client, who I willcall B, is considering the transaction shown in the attached outline. 'Afterreviewing the available literature, it does not appear that the structure of theproposal will require a Hart-Scott-Rodino ("HSR) filing. However, becausethe rules concerning limited partnerships are not explicit, I would appreciateyour reviewing the facts before my client proceeds. Any guidance you canprovide will be helpful.
B is currently aparticipant with A in an unincorporated joint venture, Y Company. A and B eachhave a 50% interest in Y Company.
In the proposedtransaction A and B would form a limited partnership, X Holdings, L.P. ("XH").XH would purchase B's-50% interest in Y Company for a price in excess of $50million and would issue 100% of the limited partnership interests in XH to B. XHwould issue 100% of the genera) partnership interests in XH to A. Y Companywould continue as an unincorporated joint venture, with A and XH as the joint venturers.
From the publishedinformation concerning the treatment of limited partnerships by the FTC staff,it does not appear that the formation of the limited partnership or the changein the venturers in Y requires an HSR filing. If this conclusion is accurate, please let meknow. If you need additional facts to understand the transaction, I will beglad to discuss the matter with you by telephone or to respond to a letter.
I foundnothing to indicate that having one company as the sole general partner andanother as the sole limited partner makes any difference in the HSR analysis. I alsofound nothing to indicate that the way the partners will split the revenues ofthe limited partnership is significant. If either of these factors is relevantto the analysis, please let me know or provide me with any guidance that isavailable.