Question
August 31, 1992
VIA TELECOPY
Mr. Hy Rubenstein
Premerger Notification Office
Bureau of Competition
Room 303
Federal Trade Commission
6th Street and Pennsylvania Avenue, N.W.
Washington, D.C. 20580
Re: Potential Hart-Scott-Rodino Filing
Dear Hy:
Late last month, we spoke regarding a potential transaction that one of our clients was considering. This letter will outline that potential transaction and will confirm our telephone conversation whereby you agreed with us that this transaction was not subject to the reporting requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the Act).
As we discussed, one of our clients proposes to enter into the transaction outlined below. For purposes of your analysis, please assume the following:
Company A meets the $100 million size of person test; and
Partnership A does not meet the $10 million size of person test because it does not have net sales or total assets of $10 million or more. Partnership A is also its own ultimate parent entity because no entity has the right to 50% or more of Partnership As profits of the right of 50% or more of Partnership As assets upon dissolution.
1. Twelve companies (Company 1 through Company 12) each own a minority general partnership interest in Partnership A. These twelve companies together own 100% of the interests in Partnership A, and the minority partnership interest in Partnership A is the sole asset of each of these companies.
2. Company A intends to enter into asset purchase agreements with each of Companies 1 through 12 to acquire each of their respective partnership interests in Partnership A in exchange for which each company will receive voting securities of Company A. The total value of the voting securities which Companies 1 through 12 will receive exceeds $15 million; no single company will receive in excess of $3.5 million worth of the voting securities of Company A.
3. Upon execution of an asset purchase agreement with each of Companies 1 through 12, Company would have the right to acquire100% of the partnership interests of Partnership A.
We believe that neither this transaction, nor any of its component parts are subject to the reporting requirements of the Act.
Company As acquisition of the respective assets of Companies 1 through 12 is not subject to the reporting requirements of the Act because the size of transaction test is not met, regardless of whether the size of person test is met for any of Companies 1 through 12.
Likewise, the acquisition by Companies 1 through12 of voting securities of Company A is not subject to the reporting requirements of the Act because the size of transaction test is not met, regardless of whether the size of person test is met for any of Companies 1 through 12.
Similarly, the assets acquisition by Company A of the partnership interests of Partnership A is also not subject to the reporting requirements of the Act because Partnership A does not meet the size of person test even if the size of transaction test is deemed to be met.
We hope that this accurately reflects our telephone conversation of last month. Please call me to discuss this letter at your earliest convenience. My direct number is listed below. I look forward to speaking with you.
Sincerely,
(redacted)