Proposed HSR Rule Changes Will Revamp Premerger Filing Requirements For Partnerships And LLCs

On March 30, 2004, the U.S. Federal Trade Commission (FTC) published significant proposed changes to the Hart-Scott-Rodino Act (HSR) premerger notification rules. These proposed changes, if adopted, will fundamentally change HSR treatment of partnerships and limited liability companies (LLCs), both at the time of formation as well as for post-formation transfers of interests in those entities. The HSR imposes mandatory premerger notification and waiting period requirements for transactions meeting certain criteria. In general, absent a specific exemption, acquisitions that result in a holding in excess of $50 million of assets or voting securities are subject to HSR requirements.

The primary thrust of the proposed rules is to harmonize the HSR treatment of corporations and "non-corporate entities." Under the proposed rules, many transactions involving partnerships and LLCs that currently are not reportable will become reportable. In light of these impending changes, counsel involved