Question
From:(redacted)
Sent:Tuesday, January 23, 2007 2:35 PM
To:Johnson, Janice C.
Subject:HSR Applicability to Hawaii RE Transaction
Janice,
Thankyou for taking the time on January 12, 2007, to discuss the applicability ofcertain exemptions under the Hart-Scott-Rodino Antitrust Act of 1976, Pub L. 94-435, 90 Stat. 1390, as amended, (the"HSR") to our client's circumstances. This correspondence shallconfirm our discussion and your conclusion that the HSR does not apply to ourclient's proposed real estate transaction described below.
As we discussed, our client is offering the followingreal property and assets for sale in (redacted) as part of a single purchasetransaction: (i) a hotel; (ii) golf courses; (iii) surrounding vacant landsadjacent to the hotel and golf courses; and (iv) stock in a public utilitiescompany owning a wastewater treatment plant, pump station and appurtenanttransmission lines and easements located on the above lands (the"Wastewater Treatment Plant"). The "surrounding vacantlands" are bare lands which have not produced revenues in excess of $5Mover the most recent three year period. The Wastewater Treatment Plant servicesthe hotel, golf courses, residences and County comfort stations. The value ofthe Wastewater Treatment Plant is significantly below $50M.
In our discussion, you confirmed our understandingthat the hotel and golf courses are exempt from the HSR pursuant to theexemptions under 16 C.F.R. 802.2(e)(1) (for hotels) and 16 C.F.R. 802.2(f) (for golf courses). Additionally, you confirmed that the surroundingvacant lands adjacent to the hotel and golf courses are likewise exemptpursuant to the "unproductive real property" exemption contained in 16 C.F.R. 802.2(c). You confirmed that the exemption applies despite the limitation in 16C.F.R. 802.2(c)(2)(iii), which provides that the exemption does not apply to"real property that is either adjacent to or used in conjunction with realproperty that is not unproductive real property and is included in theacquisition." You stated that the limitation in 16 C.F.R. 802.2(c)(2)(iii)is limited to circumstances where unproductive real property is adjacent tonon-exempt property, which is not the case here.
The Wastewater Treatment Plant is not exempt, butdoes not trigger the HSR notification requirements since its value is wellbelow the $50M threshold.
Accordingly,it is our understanding that the HSR does not apply to our client's aboveproposed transaction and the pre-merger notification requirements under the HSRdo not apply. Should you have any questions regarding the above, please do nothesitate to contact me directly.