2410012 Informal Interpretation

us-ftc-hsr-informal-interpretations-bc0439af4815d2006209295d8f71f2072410012 Informal InterpretationGuidance

Date
Rule
801.11
Staff
Kathryn Walsh
Response/Comments

Size of person must be determined using the most recent regularly prepared balance sheet created prior to consummation of the transaction. Therefore, if a balance sheet that is used by management is normally created after a capital call, and a capital call is made prior to consummation of the transaction, that balance sheet must be used to determine SOP (unless, of course, another regularly prepared balance sheet supersedes it). Additionally, 801.90 would be relevant in assessing any deviation from regular business practices.

Question

From: Walsh, Kathryn E. <kwalsh@ftc.gov>
Sent: Friday, October 4, 2024 4:19:26 PM (UTC-05:00) Eastern Time (US & Canada)
To: [Redacted]
Cc: HSRHelp <HSRHelp@ftc.gov>
Subject: RE: Your VM

Size of person must be determined using the most recent regularly prepared balance sheet created prior to consummation of the transaction. Therefore, if a balance sheet that is used by management is normally created after a capital call, and a capital call is made prior to consummation of the transaction, that balance sheet must be used to determine SOP (unless, of course, another regularly prepared balance sheet supersedes it). Additionally, 801.90 would be relevant in assessing any deviation from regular business practices.

From: [Redacted]
Sent: Friday, October 4, 2024 10:48 AM
To: Walsh, Kathryn E. <kwalsh@ftc.gov>
Subject: Re: Your VM

Thanks Kate. The question is this:

A fund is its own UPE. Based on its most recent regularly prepared balance sheet, it does not meet the SOP. But it has the ability to make a capital call to its investors for additional funds that would put it over the SOP.

The uncalled capital is not on its balance sheet. Our conclusion, therefore, is that the un-called capital is not included in the SOP. Agree?

Sheinberg, Samuel I.
From: 	HSRHe lp
Sent: 	Friday, October 4, 2024 4:20 PM
To: 	Berg, Karen E. ; Musick, Vesse lina; Shaffer, Kristin; She inberg, Samuel I. ; Si x, Anne;
Wh itehead, No ra; Fetterman, Michelle; Burton, June; Larson, Peter
Subject: 	FW: YourVM
Sent: Fr iday, October 4, 2024 10:48 AM
From: Walsh, Kathryn E. < kwalsh@ftc.gov>
Sent: Friday, October 4, 2024 4:19:26 PM (UTC-05:00) Eastern Time ( US & Canada)
To:
Cc: HSRHe lp <HSRHelp@ftc.gov>
Subject: RE: Your VM
Si ze of person must be determined using the most recent regularly prepared balance sheet created pr ior to
consummation of the transaction. Therefore, if a balance sheet that is used by management is norma lly created after a
capital ca ll, and a capital ca ll is made prior to consummation of the transaction, that ba lance sheet mu st be used to
determ ine SOP (u nl ess, of course, another regular ly prepared balance sheet supersedes i t). Addit ionally, 801.90 wo uld
be relevant in assess ing any deviation from regular business practices.
From:
To: Walsh, Kathryn E. <kwalsh@ftc.gov>
Subject: Re: Your VM
Thanks Kate. The question is this:
A fund is its own UPE. Based on its most recent regularly prepared balance sheet, it does not meet the SO P. But
it has the ability to make a capital call to its investors for additional funds that would put it over the SOP.
The uncalled capital is not on its balance sheet. Our conclusion, therefore, is that the un-call ed capital is n ot
included in the SOP. Agree?
Thanks!
•From: Walsh, Kathryn E. <kwalsh@ftc.gov>
Sent: Friday, October 4, 2024 10:23 AM
To:
Subject: Your VM
• 	I was stacked up yesterday and am looking at the same kind of day today- please feel free to send me an email
wi th yo ur question(s).
Kathryn E. Walsh
Deputy Ass istant Director
Premerger Notification Office
Federal Trade Commi ss ion
(202) 326-2977
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