8306002 Informal Interpretation

Dana Abrahamsen



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,



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.