Question
From:(redacted)
Sent:Wednesday, January 03, 2007 12:41 PM
To:Verne, B. Michael
Subject:From (redacted)
Mike,
Thise-mail sums up several phone calls and phone messages we have exchanged overthe past few days. I want to confirm that, based upon these facts, my clientneed not file because it does not meet the size of the party test.
Myclient is an asset fund (FUND II). It is a limited partnership. The generalpartner (4 individuals) owns 2% of the interest in the LP. There are numerouslimited partners, none of which owns more than 50% of the interests. FUND IIhas capital commitments, but not cash, of over $300 million. In addition, FUNDII owns 3 companies, which have total assets of approximately $148 million.FUND II carries its investment in these companies on its books as an asset inthe amount of $51 million. Its cash on hand and other assets are negligible.Netting these out, FUND II's assets, for purposes of the size of the partytest, are $97 million. Moreover, its NET SALES are less than $70 million. Basedupon these values and calculations, FUND II would not have to initiate an HSRfiling even though the size of the transaction is over $57 million.
FUNDII shares certain members of its general partner with FUND I. FUND I is also anasset fund and is also a limited partnership. FUND I clearly meets the size ofthe person test. FUND I's general partner (4 individuals) owns 2% of theinterests of FUND I. The limited partners own the remaining interests, and noneof them owns 50% or more. Two of FUND I's general partners are general partnersin FUND II. In addition, these two overlapping individuals own 50% or more ofthe general partnership interests in FUND II. Effectively then, FUND I and FUNDII are managed by the same individuals. None of these individuals, however,owns 50% or more of the interests in FUND II or FUND I. Moreover, no one isentitled to 50% of the profits or 50% of the assets upon dissolution of eitherFUND I or FUND II.
Myunderstanding is that 801.1(b)(2) does not apply to partnerships. As a result,and based upon these facts, my understanding is that FUND I and FUND II aretheir own UPEs.
Consequently, no filing is required for FUND II'santicipated transaction. Please confirm that my understanding is correct. Ifyou disagree, please contact me at the address and phone number below.