The Federal Trade Commission has announced new notification thresholds for Premerger Notification Reports that must be filed under the Hart Scott Rodino Antitrust Improvements Act (HSR). The notification thresholds are adjusted every year for inflation. The new thresholds go into effect on February 27, 2012
Continue Reading...On July 7, the Federal Trade Commission (FTC), with the concurrence of the U.S. Department of Justice, announced significant amendments to the Hart-Scott-Rodino (HSR) Premerger Notification Program. A special Katten Client Advisory will be distributed in the next several days describing the changes in detail. The changes will significantly affect private equity funds, hedge funds and other investors who use multiple investment funds as acquisition vehicles and employ common managers for those funds. The amendments will go into effect 30 days after their publication in the Federal Register. The key changes are summarized below.
Continue Reading...Co-authored by David J. Gonen
The Federal Trade Commission (FTC) is expected to announce significant changes to the Hart-Scott-Rodino (HSR) Premerger Notification Rules, the Premerger Notification and Report Form, and the accompanying Instructions in the next several weeks. The changes, which may have been presaged by proposals issued by the FTC for public comment last August, may impose significant new reporting requirements on private equity and other funds, where one of a family of funds is making an HSR investment. The public will know which of the proposed changes were adopted when the FTC releases the new form.
Continue Reading...The Federal Trade Commission has raised the thresholds governing premerger notification filings that must be made under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (HSR, or the Act). Effective February 24, transactions valued above $66 million will require HSR notification when they meet the other requirements of the HSR Act. This is an increase from the previous threshold of $63.4 million. The filing thresholds for larger transactions have been adjusted as well. The old $126.9 million threshold has been increased to $131.9 million, and the old $634.4 million threshold has been increased to $659.5 million.
Under the new thresholds, the filing fee for notifiable transactions valued above $66 million but less than $131.9 million remains at $45,000. Transactions valued above $131.9 million but below $659.5 million will require a filing fee of $125,000. Transactions valued above $659.5 million will require a filing fee of $280,000.
For transactions valued between $66 million and $263.8 million under the Act, the “size of person” test must also be met for a filing to be required. The size of person thresholds have also been revised. Under the new thresholds, one party to the transaction must have net sales or total assets of at least $13.2 million, and another party to the transaction must have net sales or total assets of at least $131.9 million. Transactions valued greater than $263.8 million under the HSR rules will require a filing regardless of the size of the persons involved.
The above changes to the HSR thresholds have been published in the Federal Register, available here.
Co-authored by David J. Gonen
The Federal Trade Commission has recently issued a series of proposed amendments to the rules governing the Hart-Scott-Rodino (HSR) Premerger Notification Program. It has also proposed significant amendments to the HSR Report form itself. The link to the Commissions Notice of Proposed Rulemaking and request for public comment can be found here.
Three of the proposed changes will have substantial impact on financial buyers and other acquirers who operate multiple funds or other investment vehicles. First, HSR filers who share common managers with other entities will need to provide information on the other commonly managed entities—defined as “associates” in the amended rules—even though they are separately owned. Thus, funds that now share a common manager, or partnerships that share a common general partner, with the HSR filer will now be treated as “associates” of the filer and the filer will need to disclose information about them.
Second, acquiring firms will need to disclose whether their “associates” (or businesses that are owned by the associates) receive revenues from the same line of business as the acquired firm. This will require that the filer inquire into the business holdings and revenue sources of its associated entities.
Third, acquiring firms will also need to disclose minority holdings of their associates (holdings of 5-50%) in entities that also drive revenues from the same industry as the acquired firm.
For financial investors, private equity, and families of funds, these proposed amendments to the HSR rules are potentially quite significant. These changes will be addressed in greater detail in a Katten CLE seminar in New York on September 23.
Co-authored by David J. Gonen
On Monday, the Supreme Court unanimously ruled that the National Football League’s collective licensing of team logos should be subject to scrutiny under the antitrust laws. This decision has potentially important implications for parties to joint ventures, IP licensing consortia, and other entities that involve collaboration among competitors or industry participants.
The NFL’s 32 teams market their intellectual property through a joint venture called NFL Properties. The joint venture acts as a single licensing agent for all 32 NFL teams. For years, NFL Properties granted nonexclusive licenses to a number of competing apparel manufacturers, who incorporated team logos into fan apparel. In 2000, NFL Properties changed its policy and granted Reebok a 10-year exclusive license to sell trademarked headwear for all 32 teams. American Needle, a licensee whose agreement with NFL Properties was not renewed when Reebok received the exclusive license, sued, alleging that the agreement between the NFL, its teams, NFL Properties, and Reebok constituted a restraint of trade that violated Section 1 the Sherman Act.
The NFL defendants argued that Section 1 of the Sherman Act did not apply to them because NFL Properties was a single entity and Section 1 only applies to conduct involving multiple parties. They argued that under Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752, 771 (1984), they were incapable of conspiring with one another in violation of Section 1 because they were a single economic enterprise, at least with respect to the challenged conduct. In Copperweld, the Court held that the coordinated activity of a parent corporation and its wholly owned subsidiary must be viewed as that of a single enterprise for purposes of Section 1. The Court this week declined to extend Copperweld protection to the NFL because “[w]hen each NFL team licenses its intellectual property, it is not pursuing the common interests of the whole league but is instead pursuing interests of each corporation itself.” The Court’s ruling only addresses whether the joint licensing is covered by Section 1 of the Sherman Act. It does not address whether the license is legal. The case will now return to the district court, where American Needle must prove that the licensing practice unreasonably harms competition.
The ruling makes it clear that joint ventures comprising separate economic actors will not enjoy blanket immunity and instead will be analyzed according to how their collective actions affect competition. (Am. Needle, Inc. v. NFL, No. 08-661, Slip Op. (May 24, 2010))
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