Question
August 24, 1995
Richard B. Smith, Esq.
Premerger Notification Office
Bureau of Competition
Federal Trade Commission
600 Pennsylvania Avenue, NW, Room 303
Washington, D.C. 20580
Re: HSR Act Advice
Dear Mr. Smith:
This letter will confirm our telephone conversation in which we discussed the proposed transaction described below and concluded that it did not require a pre-merger report form filing under the Hart-Scott-Rodino Antitrust Improvements Act (HSR Act).
Two corporations (hereinafter referred to as Corporation A and Corporation B) are interested in building and jointly owning an (redacted) As a first step, they will form a limited liability company (the LLC) having characteristics that resemble those of a partnership rather than a corporation. At the time of the formation of the LLC the LLC will not have assets of $10 million or more and there will be no commitment on the part of Corporation A or Corporation B, or anyone else, to contribute assets to, or extend or guarantee any credit or obligation of, the LLC within the meaning of 16 CFR 801.40(c). For these reasons, we conclude that the formation of the LLC is not subject to the HSR Act filing requirements.
Corporation A and Corporation B each intends to contribute a pro rata share to cover the cost of the proposed (redacted) Corporation As share will have a value of approximately $9 million while Corporation Bs will have a value of approximately $16 million. If permitted by regulatory authorities, Corporation A and Corporation B will transfer their respective (redacted) interests to the LLC upon their completion. The sole purpose of the LLC will then be to operate the (redacted). We have concluded that this transfer, if it were to occur, would also not require an HSR Act filing since it is effectively the contribution of assets in connection with the formation of an unincorporated joint venture.
Based on the foregoing facts and analysis, we have concluded that the proposed transaction, if it were to occur, would not require a filing under the HSR Act. If you require any additional information, please let me know.
Sincerely,
(redacted)
cc: (redacted)