No need to report - newly formed corp with no balance sheet & no other UPE
March 4, 1983
Ms. Patricia Foster
Premerger Notification Office
Federal Trade Commission
7th Street and Pennsylvania Avenue
Washington, D.C. 20580
Dear Ms. Foster:
In accordance with our telephone conversation of
March 2, 1983, your confirmation that the transaction
described below would not be subject to the premerger
notification requirements of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 is requested. The proposed trans-
action consists of the purchase of assets valued at more
than $15 million from an entity with total assets exceeding
$100 million by a newly formed corporation. Prior to the
acquisition, the newly formed corporation will borrow up to
$14 million from an unrelated financial institution, will
have approximately $500,000 in equity from private investors
and will have no other assets. $12 million of the loan
proceeds will be used by the newly formed corporation to
effect the acquisition which is the subject of this inquiry.
It is my understanding that the proposed trans-
action would be exempt under the Federal Trade Commissions
netting out rule; i.e., that the $12 million in loan proceeds
used to acquire the assets would be netted out for the pur-
poses of the size determination of the newly formed corporation.
Accordingly, under these facts, the newly formed corporation
would be treated as having assets of only $2.5 million and
the transaction would be below the jurisdictional threshold.
Kindly confirm you agreement with this analysis.
Please do not hesitate to contact me if you have
any questions or require any additional information., In the
event I an unavailable, you may contact my associate,
(redacted), who is fully familiar with
the proposed transaction.
Thank you for your assistance.