1909005 Informal Interpretation

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Sheinberg, Samuel I.
To:
Cc:
Subject: 	RE: Formation question 801.40/801.50
From: Sheinberg, Samuel I.
Sent: Wednesday, September 04, 2019 3:59 PM
To:
Cc:
Subject: RE: Formation question 801.40/801.50
We agree with all three of your points.
Sam
From:
Sent: Tuesday, September 3, 2019 2:43:23 PM (UTC-05:00) Eastern Time (US & Canada)
To:
Cc:
Subject: FW: Formation question 801.40/801.50
Dear all,
We have a JV formation where JV Partner 1 is contributing assets (nonexempt, valued in excess of $90 million) and JV
Partner 2 is contributing only cash which will be used to fund the JV entity (the cash will not be distributed out to JV
Partner 1). JV Partner 1 and JV Partner 2 will each hold 50% of the JV entity (an LLC). We understand that if one JV
partner contributes cash, and the cash contributions stay at the JV entity, this structure is viewed as a formation and not
an acquisition (https://www.ftc.gov/enforcement/premerger‐notification‐program/informal‐interpretations/1606002).
Do you agree that:
1. 	JV Partner 2 would file as acquiring person in a formation filing to hold 50% of Newco’s noncorporate interests
(because JV Partner 2 is acquiring control of the assets being contributed to the newly‐formed JV entity by JV
Partner 1);
2. 	JV Partner 1 has no filing obligation because in the formation, JV Partner 1 is not acquiring control of any new
assets (i.e., because JV partner 2 is only contributing cash to fund the newly‐formed JV entity); and
3. 	The JV entity would not have a filing obligation for the formation.

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