8301003 Informal Interpretation

Date:
Staff:
Wayne Kaplan

Question

(redacted)

January 5, 1983

Federal Trade Commission

Room 301

7 Pennsylvania Avenue, N.W.

Washington, D.C. 20580

Attention:Mr. Wayne Kaplan

Re:Advice Concerning Hart-Scott-Rodino

Antitrust Improvements Act of 1976

Dear Mr. Kaplan:

This letter is to confirm the advice which you gave

me during our telephone conversation yesterday regarding the

Federal Trade Commissions position with respect to partner-

ships and the size-of-persons test under the Hart-

Scoot-Rodino Antitrust Improvements Act of 1976 (the Act).

As I explained to you, a client of this firm is a

partner in an unincorporated joint venture with a subsidiary

of our client and an unrelated party. Our client and the

unrelated party are each a person within the meaning of

Rule 801.1(a)(1) under the Act with total assets and annual

net sales in excess of $100 million.

The joint ventures principal asset is a subleasehold

interest in a hotel property which it is now proposing to sell

to an unrelated third party. The question I raised with you

was whether the Federal Trade Commission is continuing to take

the position that a partnership entity is its own ultimate

parent entity for purposes of determining whether the size

of the persons threshold under the Act is satisfied.

You advised me that the Federal Trade Commission

continues to take the position that a partnership entity is

its own ultimate parent entity for purposes of determining the

relevant person under the Act. You further advised me that

for purposes of determining whether the size of the person

threshold is satisfied reference need only be made to the total

assets or annual net sales of the partnership (as stated in

its most recently prepared financial statements) and not to

those of its partners or entities controlling its partners.

I also explained to you that the purchaser of the

subleasehold interest has been granted an exclusive franchise

by an unrelated third party to operate hotel and restaurant

businesses in the state in which the subject hotel property

is located. I asked you whether under those circumstances the

unrelated franchisors total assets and annual net sales

would be aggregated with those of the purchaser for purposes

of determining whether the purchaser satisfies the size of

the Persons test under the Act. You advised me that the total

assets and annual net sales of the franchiser would not be

aggregate with the total assets and annual net sales of the

purchaser for purposes of determining the size of the purchaser.

I also understand that the advise of the Justice

Departments Antitrust Division need not be sought regarding

the matters described above since it follows the Federal Trade

Commissions advice on such matters.

The parties would like to consummate the above-

mentioned transaction in the near future. Accordingly, if you

are unable to concur with any part of the foregoing summary

of our telephone conversations, or if you have any questions or

further comments, I would appreciate it if you would contact me

not later than January 16, 1984. Thank you for your assistance.

Very truly yours,

(Redacted)

(Redacted)

About Informal Interpretations

Informal interpretations provide guidance from previous staff interpretations on the applicability of the HSR rules to specific fact situations. You should not rely on them as a substitute for reading the Act and the Rules themselves. These materials do not, and are not intended to, constitute legal advice.

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