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Date
Rule
801.10(b)
Staff
Michael Verne
Response/Comments
In an asset acquisition, paying off debt & assumption of debt are treated the same. This is a $75MM transaction.

Question

From:(redacted)

Sent:Thursday, February 08, 2007 10:59 AM

To:Verne, B. Michael

Subject:Paying down debt in an asset acquisition

Mike -we had a discussion once about an asset transaction in which the buyer will payan amount over the filing threshold (e.g. $75 million) but actually a largepart of that amount (e.g. $50 million) will be used to pay off debt of thetarget so that the seller will only receive $25 million for the assets. I knowwe discussed whether the $50 million would be deemed an assumption of debt sothat it should be included in the "value of transaction" but I cannotremember where we came out. In other words do we have a $75 million transactionor a $25 million transaction? Can you remind me?

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