Question
October 19, 1994
Richard Smith, Esquire
Premerger Notification Office
Bureau of Competition
Federal Trade Commission
Washington, DC 20580
Dear Mr. Smith:
This letter is to confirm a conversation that we had on September 12, 1994 regarding theavailability of an intraperson exemption for non-profit membership corporations from premergernotification requirements under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, asamended (the Act).
We represent a non-profit corporation (the Parent Corporation) that is the sole memberof two subsidiary non-profit corporations (hereinafter referred to as Subsidiary A andSubsidiary B). The Parent Corporation is not controlled under the Act by any other person. The Parent Corporation intends to cause the merger of Subsidiary B with and into Subsidiary A. As a result of this transaction, the Board of Directors of Subsidiary A, the surviving corporation,will be reconstituted to consist of certain existing members of Subsidiary As Board and certainexisting members of Subsidiary Bs Board. The Parent Corporation will continue to be the solemember of Subsidiary A following the merger.
In light of the fact that Parent Corporation controls Subsidiary A and Subsidiary B byvirtue of membership interests as opposed to the ownership of voting securities, the exemptionsunder Section 7a(c)(3) of the Act and Section 802.30 of the rules promulgated pursuant to theAct are not applicable. Nevertheless, you advised me that the transaction will be exempt from theActs filing requirements if the following two conditions are met:
(1) That no other person has any ownership interest in the corporations being merged(i.e. that the Parent Corporation does not share control of Subsidiaries A and Bwith any other person); and
(2) That all premerger notification filings under the Act have been properly submittedby the Parent Corporation in connection with its acquisition of control overSubsidiaries A and B, or that appropriate determinations were made as to theavailability of valid exemptions from the filing requirements.
If the foregoing is incorrect, I would ask that you contact me as soon as possible. Theparties intend to file the necessary documents to effect the merger of (redacted).
Thank you for your assistance.
Very truly
(redacted)