8306002 Informal Interpretation

Date:
Rule:
801.11
Staff:
Dana Abrahamsen

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)

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