Question
(redacted)
February 14, 1985
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
Mr. Wayne Kaplan
Federal Trade Commission
Room 301
FTC Building
7th and Pennsylvania Avenue, N.W.
Washington, D.C. 20580
Re:Interpretation of Control under the Pre-Merger
Notification Regulations
Dear Mr. Kaplan:
On January 30, 1985, I spoke with you by telephone concerning the applicability of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, Section 7A of the Clayton Act, 15 U.S.C. 18a (the Act), and the regulations promulgated under the Act, 16 C.F.R. Parts 801, 802 and 803 (the Regulations), to leveraged buy-outs. At that time, you informed me that, for purposes of determining the identity of the acquiring person and the acquired person in a merger of acquisition transaction, both the FTC and the Department of Justice interpret Section 801.1(b) of the Regulations such that a limited partnership cannot be controlled by another entity and therefore will always be considered the ultimate parent entity (Section 801.1Ia)(3) of the Regulations) in a merger or acquisition transaction in which the limited partnership, or an entity it controls, is involved.
On February 13, 1985, I spoke with Ms. Addie Williams of your office in connection with a different leveraged buy-out transaction with which our Firm is also involved. I explained to Ms. Williams that the acquired person has assets of more than $10,000,000 but less than $100,000,000; that the transaction involves the purchase of assets valued at approximately $30,000,000; and that the entity acquiring the assets is a newly-formed limited partnership which, if deemed to be the acquiring person in this transaction, will have assets of less than $25,000,000. Ms. Williams reiterated FTC staffs interpretation of Section 801.1(b) of the Regulations discussed above.
In reliance upon my telephone conversations with you and with Ms. Williams, we have determined that this transaction is exempt from the filing requirements of the Act and the Regulations. I would appreciate your reviewing this letter at your earliest convenience and contacting me to confirm that we are correct in our understanding of FTC staffs interpretation of Section 801.1(b) of the Regulations.
Thank you for your attention to this matter.
Very truly yours,
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