Question
(redacted)
August 29, 1996
BY HAND
Premerger Notification Office
Bureau of Competition
Federal Trade Commission
600 Pennsylvania Avenue, NW, Room 303
Washington, D.C. 20580
Re:
Dear Dick:
This letter memorializes the advice you provided over the telephone on August 28 concerning the appropriate analysis under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the implementing regulations, of the following transaction:
Persons A and B will form a limited liability company
(LLC) into which each will contribute assets or cash in return
for a 50% LLC ownership interests. Certain of the assets agreed
to be contributed will not be transferred to the LLC until third party
consents are received and other title encumbrances are resolved, a process that
may take several months to complete. The LLC will be managed by a board
whose members will solely consist of employees or officers of A and B respectively.
You advised that this transaction constitutes an exempt LLC formation transaction, because the LLC will be exclusively governed by a board consisting of representatives of A and B, with no members who are not officers or employees of A or B. You further advised that the exempt character of the transaction is not affected by the fact that certain assets will not be contributed until several months after the LLC is actually created. You analogized to the example following 16 C.F.R. Section 801.40, and indicated that because the assets are intended and agreed to be contributed in connection with the LLCs formation their transfer even after the creation of the LLC would be deemed part of the LLC formation transaction. Thus, you advised that no Hart-Scott filing would be required.
If this letter does not accurately reflect the advice you provided concerning the nonreportablility of the transaction described above, please call me as soon as possible.
Thank you for your time and assistance.
Very truly yours,
(Redacted)
cc: (redacted)