Question
(redacted)
January 27, 1986
Dana Abrahamsen, Esq.
Federal Trade Commission
Pre-Merger Notification Office
Room 301
6th Street & Pennsylvania Avenue, N.W.
Washington, D.C. 20580
Dear Mr. Abrahamsen:
This is to confirm our telephone conversation of January 24 in which you advised me that, in measuring the size of a newly formed entity (which does not have a regularly prepared balance sheet) for purposes of the size-of-person test, cash held for payment of expenses ancillary to a proposed acquisition can be disregarded. Thus, cash held for payment of acquisition-related expenses will now be treated like cash earmarked as consideration. Acquisition-related expenses include such items as bank commitment fees, investment banking fees, counsel fees, and so forth.
You indicated that this advice will be codified in the pending proposed rule changes but that it is immediately effective, and can be relied upon, as an informal staff opinion.
Thank you very much for your assistance in clarifying this issue.
Sincerely,
(redacted)
(redacted)
NO STAFF COMMENTS