The Federal Trade Commission ("FTC") and U.S. Department of Justice ("DOJ") have recently revisited several HSR exemption interpretations and sought penalties from investors relying on others. The Mergers & Acquisitions and Transportation & Energy Industries Committees presented a panel on March 31, 2017 at the ABA Antitrust Section Spring Meeting that addressed these recent developments and examined whether certain exemptions, such as those for acquisitions of investment rental property and warehouses, are especially vulnerable in the energy or any other industry. Karen Kazmerzak of Sidley Austin LLP chaired the panel, which was moderated by William R. Vigdor of Vinson & Elkins LLP. Speakers included Kay Lynn Brumbaugh of Andrews Kurth Kenyon LLP, Steve J. Kaiser of Cleary Gottlieb Steen & Hamilton LLP, Kara Kuritz, Attorney Advisor in the DOJ's Legal Policy Section, and Kathryn E. Walsh, Deputy Assistant Director of the FTC's Premerger Notification Office ("PNO").
Mr. Vigdor opened the discussion by outlining the basic thresholds for determining whether a transaction is subject to the requirements of the HSR Act, noting in particular that the current size-of-transaction threshold is $80.8 million. Mses. Kuritz and Walsh then outlined the resources available to explain the HSR requirements and process. These resources include: the statute (15 U.S.C. § 18a), which sets forth the HSR thresholds, waiting period, and exemptions; the HSR Regulations (16 C.F.R. §§ 801-803); the Statement of Basis and Purpose, which explains the rationales behind the specific rules; and the PNO's formal and informal interpretations. Ms. Walsh stated that the PNO Staff welcomes requests for informal interpretations and is happy to work with parties to determine whether a particular transaction is reportable. She also stated that when seeking an informal interpretation, HSR counsel should email all members of the PNO Staff to ensure that the request is not missed. Ms. Walsh went on to highlight the materials on the PNO website, including a searchable database of informal interpretations, blog posts, the Style Sheet for HSR Filings, and the instructions for completing the form. Ms. Walsh noted that late last year the agencies released revised instructions, which included changes to Items 3(a), 4(b), and 7(c).
Ms. Walsh then explained how HSR filings are processed. Each Wednesday the PNO circulates a package of all HSR filings received the prior week for a screening review by the FTC and DOJ. The package includes a summary sheet with recommendations on which transactions should be granted early termination. To ensure an HSR filing is included in the Wednesday package, parties should submit their filings by the previous Friday, although sometimes filings submitted on a Monday can also be included depending on Staff's workload. The filing fee must also be received before the HSR notification will be included in the screening package. Finally, Ms. Walsh noted that email is now the preferred way of sending waiting period and early termination letters.
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