8309003 Informal Interpretation

801.10; Accounts Receivable
Dana Abrahamsen

No written comments



September 14, 1983


Dana Abrahamsen, Esq.
Premerger Notification Office
Federal Trade Commission
Washington, D.C. 20580

Dear Mr. Abrahamsen:

In our telephone conversation of September 13, 1093, I requested informal advice, pursuant to Section 803.30 of the FTC Rules, with respect to the following facts:

Company A seeks to acquire assets from Company B. As part of this agreement, Company A also will agree to collect certain of Company Bs accounts receivable. Company A, however, will have no right to retain the money collected. Instead, it will receive a fee for performance of this collection service.

I asked whether the accounts receivable or the service fee should be treated as a part of the consideration for the assets to be purchased. You stated that:

(a) Company A has no beneficial interest in the receivables. Accordingly, the receivables should not be treated as a part of the consideration.

(B) The fee Company A earns through its collection of Company Bs receivables should be treated as consideration only to the extent that the fee exceeds fair market value or such service.

I believe this letter accurately states the substance of our telephone conversation. If it does not, please contact me as soon as possible.




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