8306004 Informal Interpretation

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)

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.

Learn more about Informal Interpretations.