8306004 Informal Interpretation

us-ftc-hsr-informal-interpretations-a73a41f1f2379fe77f7337625c3e309b8306004 Informal InterpretationGuidance

Date
Rule
801.11
Staff
Patrick Sharpe
Response/Comments
Agree

Question

(redacted)

June 15, 1984

Office of Premerger Notification
Federal Trade Commission
Washington, D.C. 20580
Attn:Patrick Sharpe, Esq.

Dear Mr. Sharpe:

This letter will serve to follow our telephone conversation

today wherein I described the following transaction to you.

Corporation A, a company with over $100 million in net sales

or total assets, will sell certain assets to Corporation B

for approximately $42 million. Corporation B is a newly

formed corporation of which at least 60% percent of its

voting securities are owned by Corporation C. Corporation C

is also a newly formed corporation of which 100% of its

voting securities are owned by Limited Partnership which

has as its General Partner, an entity, whose ultimate parent

entity has over $10 million in net sales or total assets.

The partners, both general and limited, will contribute a

total of $5,000,000 of equity to the partnership: the partnership

will then purchase 100% of the stock of Corporation C which

will use that money to purchase at least 60% of the stock of

Corporation B. corporation B will use the $5,000,000 to

purchase the assets from Corporation A as well as Borrow

approximately $37 million from an unaffiliated financial

institution. This loan will be secured by the assets purchased

by Corporation B.

Limited Partnership d will not have funds over $10

million remaining after it purchases the stock of Corporation

C. Additionally, corporation C or B will no have $10

million after it purchases the assets from Corporation A

other than the assets held by Corporation B; essentially,

Corporation B will use all its paid-in capital to go as a

part payment for the assets of Corporation A.

We concluded that this transaction is not reportable

since the ultimate parent entity of the acquiring company is

Limited Partnership D and it does not meet the size-of-the-

person test under the Hart-Scoot-Rodino Rules and Regulations.

If this letter does not accurately reflect our telephone

conversation, please let me know.

With best regards.

Sincerely.

(Redacted)


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