Question
(redacted)
December 2, 1988
FEDERAL EXPRESS
Premerger Notification Office
Bureau of Competition
Federal Trade Commission
600 Pennsylvania Avenue, NW, Room 303
Washington, D.C. 20580
Re: Acquisition of (Redacted)
Dear Mr. Smith:
Over the last several days, and I have discussed by telephone a transaction in which (redacted) will acquire the assets of (redacted). The bulk of our conversations have concerned specific items of information required in the Antitrust Improvements Act Notification and Report Form. Yesterday, you were kind enough to spend a considerate amount of time with me discussing the exemption found at 16 CFR 802.20 from the provisions of the Hart-Scott-Rodino Antitrust Improvements Act (15 U.S.C. 18a (the Act). In this letter, I would like to confirm my understanding of the substance of our conversation.
Background
(Redacted) is a (redacted) corporation with its principle (redacted) is presently the debtor-in-possession in a proceeding under Chapter 11 of the Federal Bankruptcy Code. (Redacted) Plan of Reorganization as currently proposed would include a transaction in which (redacted) would purchase every asset owned by (redacted) except for claims or causes of action for recovery of property by the bankruptcy estate for preferences, fraudulent conveyances or transfers to insiders recoverable under the Bankruptcy Code. I enclose for your records and convenience one copy of the Bankruptcy Disclosure Statement (the Disclosure Statement). The Disclosure Statement provides a more detailed description of the transaction and the parties involved.
Exemption
Based on my review of the applicable statute and regulation, as well as my discussion with you yesterday afternoon, it appears to me that, because of the size of the transaction, (redacted) is exempt from the requirements of the Act pursuant to 16 C.F.R. 802.20. Specifically:
(1) The acquisition satisfies 7A(a)(3)(A) of the Act: (Redacted) proposes to acquire virtually 100% of (redacted) assets.
(2) The acquisition does not satisfy 7A(a)(3)(B) of the Act: As a result of the acquisition, (redacted) will not hold an aggregate total amount of voting securities and assets of (redacted) in excess of $15,000,000. Specifically, (redacted) will not hold any voting securities of (redacted) after the transaction and the total amount of assets (at book value) as of October 31, 1988, will equal $6,891,346. The purchase price of those assets equals $5,068,134 plus current trade payables, sales expense and costs of executory contracts would not cause either the purchase price or book value of the assets to exceed the $15,000,000 ceiling.
(3) (Redacted) will not hold assets valued at more than $15,000,000: The purchase price can, in my judgment, be taken as the fair market value of the assets to be purchased for two reasons. First, the bargaining between (redacted) and (redacted) has been at arms length and both firms are represented by counsel. Second, the transaction must be approved by (redacted) creditors and ultimately by the Bankruptcy Court. The purchase price can, therefore, constitute the value of the assets as the term is used in 16 C.F.R. 802.20(a).
It appears to me, therefore, that the transaction is exempt from the Act under 16 C.F.R. 802.20.
Request for Confirmation
In order to complete the acquisition, we respectfully respect request that you confirm in writing that our analysis is correct. I understand that this may be some inconvenience. Compliance with the Act is, however, a condition precedent to out ability to close the acquisition. In addition, we will need to establish compliance with the Act in order to secure the approval of the Bankruptcy Court.
The acquisition is schedule to close on December 19, 1988. I would appreciate, therefore, any consideration you could afford us in expediting our request. Please address any questions and your response to the undersigned.
Respectfully,
(Redacted)
cc: (redacted)
(Attachment)
UNITED STATES BANKRUPTCY COURTWESTERN DISTRICT OF WISCONSIN
______________________________________________________________________________
In the Matter of:In Bankruptcy No.
(Redacted) (Redacted)
Debtor.NOTICE OF HEARING ON DISCLOSURE STATEMENT
______________________________________________________________________________
PLEASE TAKE NOTICE that is hearing will be held in the United States Bankruptcy Court for the Western District of Wisconsin at 120 N. Henry Street, Room 340, Madison, Wisconsin before the Honorable Robert D. Martin, Bankruptcy Judge, at 10:45 o clock in the fore noon on the (redacted) day of (redacted) (redacted), or as soon thereafter as counsel may be heard, as to whether the Debtors Disclosure Statement should be approved. A copy of the Disclosure Statement is on file with the Court and is available for review at normal business hours or may be procured upon request from counsel for the Debtor-in-Possession.
PLEASE TAKE FURTHER NOTICE that if any creditor wishes to object to said Disclosure Statement, such creditor must file such objection in writing with the Clerk of the U.S. Bankruptcy Court for the Western District of Wisconsin, and must send a copy to the below-signed attorney not less than five days prior to the date of the above hearing.
Dated this (redacted) day of November, (redacted).