Question
March 1, 1996
CERTIFIED MAIL
Mr. Richard B. Smith
Federal Trade Commission
Assistant Chief
Premerger Notification Office
Bureau of Competition
Federal Trade Commission
Washington, D.C. 20580
Re: Acquisition of a Membership in a Nonstock, Nonprofit Corporation as an Acquisition of Assets
Dear Mr. Smith:
I am writing to confirm our phone conference of February 29, 1996 with [redacted] of this office, [redacted] and [redacted] and me.
As we discussed, represents an "Acquiring Person" who will become the sole member of a Virginia nonstock, nonprofit corporation which operates an (the "Acquired Person") in substitution for the current sole member. My firm represents the current member and the Acquired Person. You confirmed that the Federal Trade Commission takes the position that any restructuring in the memberships of nonstock, nonprofit corporations is considered a consolidation within the meaning of Section 801.2(d) of the Regulations, but that the Federal Trade Commission treats such acquisitions of membership interests in nonstock corporations as asset acquisitions for report form and valuation purposes. Furthermore, you confirmed that Section 802.20(b) of the Regulations, which provides that acquisitions of voting securities which confer control of an issuer with annual net sales or total assets of $25,000,000 or more, is inapplicable to our transaction.
Accordingly, the acquisition of a membership interest in a nonstock, nonprofit corporation is only be (sic) reportable if the parties meet the size of the parties test and the fair market value of the assets to be acquired are more than $15,000,000.
I trust this letter accurately reflects our phone conference. If it does not, or if you have any questions, please contact me.
Very truly yours,
[redacted]