Question
(redacted)
August 11, 1988
Wayne Kaplan
Premerger Notification Office
Bureau of Competition
Federal Trade Commission
6th & Pennsylvania Avenue, NW
Room 303
Washington, D.C. 20580
Dear Mr. Kaplan:
I am sending this letter in confirmation of our telephone conversation yesterday in which we discussed the applicability of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the Act) to the three transactions outlined in (redacted) letters to you, dated August 2, 1988. You may want to refer to that letter at this time.
From our telephone conversation, I understand that your opinion regarding the Acts applicability to the three transactions is as follows:
Transaction 1:
The distribution of assets valued at $90,000,000 to a 50/50 partner upon the dissolution of a partnership is a reportable transaction under the Act, and each partner must report as both an acquiring and acquired person. Accordingly, (redacted) must report its acquisition of assets upon the dissolution of (redacted)
Transaction 2:
The formation of a partnership and consequent contribution by one partner of voting securities and the contribution of cash by the other partner is non-reportable under the Act, because as long as it does not give 100% ownership of the partnership to any one person, the formation of a partnership, the contributions of its partners and the acquisition of interests therein are neither acquisitions of assets or of voting securities. Therefore, the formation of a partnership between (redacted) and (redacted) is an exempt transaction where (redacted) and one of its subsidiaries contributes 100% of the voting securities of (redacted) and a partnership including (redacted) contributes $600 million in cash.
A state law and/or private agreement which deems otherwise voting stock as non-voting while it is held directly or indirectly by its issuer, effectively makes that stock non-voting for HSR purposes and, therefore, not subject to the Act. Accordingly (redacted) need not file a Notification Report Form when it exercises a put-option which requires a partnership that includes (redacted) to purchase non-voting securities.
If my understanding, as stated above, of the opinions that you gave in our telephone conversation is different from yours, please call me at (redacted). Again, I thank you for your advice and indulgence.
Very truly yours,
(Redacted)
(Redacted)