Question
From: (redacted)
Sent: Thursday, June 11, 2009 10:36 AM
To: Verne, B. Michael
Subject: HSR Interpretation
June 11, 2009
B. Michael Verne
Premerger Notification Office
Federal Trade Commission
600 Pennsylvania Avenue, NW
Washington, DC 20580
Mike:
Thank you for taking the time to speak with me thispast Tuesday. I am writing to confirm the advice you provided. The facts andthe discussion are set forth below.
Background
Company A plans to acquire assets from Company Bout of bankruptcy if it is the winning bidder in a bankruptcy auction process.In addition to acquiring assets, Company A would reimburse Company B forcertain pre-paid expenses including rent on leases that will be assumed on agoing-forward basis.
Company A's bid to acquire the assets from CompanyB is supported by Company C, which is a creditor of Company B. Company A andCompany C have agreed that if Company A is the successful bidder for Company'sB assets in the auction that Company C would pay Company A certain amounts inconsideration of Company A agreeing to certain modifications to contractualrights with Company C that Company A would acquire from Company B. Company Chas also offered to Company B to forgive certain obligations owed by Company Bto Company C if Company A is selected as the winning bidder in the auction, althoughsuch forgiveness would not change the amount that Company A would pay toCompany B nor the amount that Company C would pay to Company A.
Discussion
As discussed, the reimbursement of pre-paidexpenses as described above is considered the acquisition of cash equivalents,which are exempt assets under the Hart-Scott-Rodino Antitrust Improvements Actand are not included in determining the size of the transaction.
With respect to Company's C involvement, theforgiveness of certain obligations of Company B by Company C as described abovewould also not be included for purposes of determiningthe size of the transaction.
Thank you again foryour consideration and assistance in this matter. If you do not believe thisnote reflects the facts discussed in our telephone conversation, or if I havemisstated the advice you gave, please contact me as soon as possible.