Question
July 19, 2004
Michael Verne, Esq.
Premerger Notification Office
Federal Trade Commission
Washington, D.C. 20850
Re: Confirmation of Informal Interpretation
Dear Michael:
The purpose ofthis letter is to confirm an informal Hart-Scott-Rodino Act interpretation whichyou provided to me by telephone on June 7, 2004. During that conversation, Iinformed you that we represented an insurance company that owned a number ofcommercial leasing businesses, including a marine container leasing business.Our client wishes to sell its marine container leasing business. Our client andthe buyer satisfy the HSR Act size-of-person tests, and thetransaction would satisfy the statutory size-of-transaction test.
I also informedyou that, following the sale of its marine container leasing business, theultimate parent (either directly or through its subsidiaries) would continue toown other commercial leasing and/or financing businesses, including for examplean aircraft leasing business.
You told methat, in light of the fact that the ultimate parent would remain in anothercommercial leasing and/or financing business following the sale, the proposedsale of its marine container leasing business would be viewed as a sale ofgoods in the ordinary course of business, and therefore exempt under subsection(c)(1) of the HSR Act, 15 USC18a(c)(1). Although the sale of all or substantially all the assets of anentity is not eligible for "ordinary course" treatment if the saleresults in an exit from that business, you explained that the PremergerNotification Office broadly views entities that are engaged in commercialleasing and/or financing as engaged in a single business. Thus the sale of anentity engaged in commercial leasing and/or financing is not viewed as an exitfrom that business, so long as the ultimate parent of the seller continues toown or operate any other commercial leasing and/or financing business. (Aspecific exception is made for sales of entities engaged in the consumer creditcard lending business.)
You also confirmedthat the exemption would be retained if the sale of an entity engaged incommercial leasing and/or financing also involved other ancillary businesses.Thus, for example, the marine container leasing business that is being soldalso includes the business of selling surplus containers. Inclusion of thisancillary business in the sale of the marine container leasing business wouldnot affect the continued applicability of the "ordinary course"exemption.
Please let meknow by July 26 if I have misstated your informal interpretation in any way.Thanks, as always, for your help.