1109004 Informal Interpretation

Michael Verne

Correct on both points
1) If the acquiring entity is an LP, then
presumably the corporation is a limited partner. I would be surprised if that
chain went any higher, because the corporation probably doesn't have its
investment decisions managed by another entity. You still start at the bottom
and go up. In this case you are starting with the LP at the bottom and going
up to both the corporate UPE and the general partner (assuming the
corporation is not the GP, because it controls the LP). It is the chain with
the GP that probably will produce associates, if there are any, of the LP
(e.g., other LPs that have the same GP as a general partner).
2) I have only heard of two structures so far
where the chain goes all the way to a top entity. Kate encountered one where
the same GP was at the top of an entire family of PE funds. I ran across a
rather bizarre structure where a rich individual was at the top. Every time
he wanted to acquire another company he created a new chain, with an LP at
the bottom (the acquisition vehicle), which had a GP, whose investment
decisions were managed by an LLC management company, which the individual
held more than 50% of. Most of the structures we have been asked about look
more like the "multiple silo" structure that we were talking about
yesterday, where only one vertical segment of the family of funds came into





Tuesday, September 13, 2011 12:17 PM


Verne, B. Michael; Walsh, Kathryn; Berg, Karen E.

Thanksfor the heads up on the call yesterday. I found it quite helpful.

Onthe associate point, you suggested to start from the bottom up. If theacquiring entity is a partnership and its upe is a large corporation, one thenneeds to identify any associates of the upe--or any entity it controls--forpurposes of items 6 and 7, correct?

Iunderstand that your experience to date is that one does not get that far upthe chain from the acquiring entity but I can see situations in which theassociates ofthe acquiring entity include the top company in the chain-even ifit is not a control person for HSR Act purposes-and one would then need toidentify all associates of that top company for Item 6 and 7 purposes, correct?

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