Question
(redacted)
April 5, 1985
Wayne Kaplan CERTIFIED MAIL
Room 301 Return Receipt Requested
Federal Trade Commission
6th Street & Pennsylvania Ave., NW
Washington, D.C. 20580
Re:Hart-Scott-Rodino Act
Dear Mr. Kaplan:
This is to reiterate our conversation of April 2, 1985, regarding the need to file a Notification and Report Form for Certain Mergers and Acquisitions.
The facts that we discussed were that our clients corporation, person A, is purchasing a subsidiary corporation, X, from person B. A will receive 100% of the voting securities of X for $4 million, payable to B. X has only one class of stock, all voting common. A will acquire no shares of B other than the shares of X, nor any assets of B.
Regularly prepared accounting statements for the year ending 12/31/84 indicate that corporation X had annual net sales of (redacted) million and total assets of $(redacted) million disregarding liabilities.
It is our understanding that based on the above information, the transaction qualifies for a 802.20 exemption. As that section is construed, A will acquire (1) less than $15 million in total amount of voting securities and assets of B, and (2)(i) less than $15 million worth of assets of B, and (ii) voting securities which confers control of an issuer that has less than $25 million in annual net sales or total assets.
For the purposes of this sale, corporation X will undergo a full audit on April 30, 1985. The purchase price of $4 million will be be [sic] adjusted depending upon the outcome of the audit. Although it can be argued that this will not constitute a regularly prepared statement of income and expense, or balance sheet, pursuant to CFR 801.11, there is at least an issue as to whether a filing is required in the unlikely event that annual net sales or total assets exceed $25 million for the year ending April 30, 1985.
The results of the audit are not anticipated to be obtainable until July, 1985. by that time the transaction shall be complete.
In the event the audit for the period ending April 30, 1985 indicates that the asset values or the annual net sales exceed the thresholds, we will of course reconsider the above. If you disagree with any of the foregoing, please contact the undersigned immediately. Thank you very much for your courtesies.
Very truly yours,
(redacted)
(redacted)