Question
(redacted)
June 2, 1983
Mr. Dana Abrahamson
Federal Trade Commission
Washington, D.C. 20580
Re:Premerger Notification
Dear Mr. Abrahamson:
Based upon numerous conversations with you over the last
eighteen months, I have advised my client that the following
proposed acquisition is not reportable under the Hart-Scott-
Rodino Antitrust Improvements Act. If you disagree with any
of the advice I have given, please advise me promptly so that
my client can make an appropriate filing and observe the wait-
ing period.
The Seller is a corporation with annual net sales and
total assets each in excess of $100 Million. It proposes to
sell assets of one of its operating divisions to Newco for
more than $15 million. Newco is a corporation which will be
formed for purposes of making the acquisition. More than 50%
of its stock will be held by X, a limited partnership. Xs
assets (it does not have sales), as shown on its most recent
regularly prepared financial statement were less than $10 Million.
The General Partner of X is also the general partner of
another limited partnership which has assets in excess of $10
Million. You have advised ,e that the Federal Trade Commission
takes the position that a partnership is always its own Ultimate
Parent Entity. Therefore, even though X is controlled by an
entity which controls another entity with assets of more than
410 Million, the FTC will look only to the balance sheet
of X to determine if the size of person test of Section 7A(a)(1)
is met. Since X is not a $10 Million Person, and No Ultimate Parent
Entity with annual net sales or total assets exceeding $100 Million
will receive 15% or more of the stock of Newco. Therefore, Rule
801.40's size of person test for contributors will not be met.
Yours truly,
(Redacted)
(redacted)