M&A

Premerger Notifications and Interlocking Directorates: FTC Increases Thresholds

Isolated Dollar ChartBy Melanie Figueroa

On January 26, the Federal Trade Commission (FTC) announced their annual update to the size-of-transaction thresholds for both premerger notifications and interlocking directorates. The FTC revises these thresholds annually based on changes in gross national product. This year’s update included significant increases.

Changes to Premerger Notification Thresholds

Under the Hart-Scott-Rodino Act (HSR), transactions that meet the following three tests are required to file premerger notifications with the FTC and the Antitrust Division of the Justice Department: (more…)

New Partnership Audit Regime and Partnership M&A Transactions

business man financial inspector and secretary making report, calculating or checking balance. Internal Revenue Service inspector checking document. Audit concept.By Charles Kolstad and Robin C. Gilden

Background:

Congress has changed the way partnership[1] audits will be conducted in the future. Beginning with tax years starting on or after January 1, 2018, audits will still be done at the partnership level; however unlike current practice where adjustments and additional tax payments are made at the partner level, under the new rules the adjustments and additional tax payments will in many cases now be done at the partnership level with the payments made in the year the tax audit is finalized. The changes were made to make it easier for the IRS to audit partnerships.

The new rules raise a number of unanswered questions in the M&A arena all of which require a significant rethinking of the way partnership M&A transactions are structured and documented. There are likely to be significant differences in the responses to the Open Issues set out below between a transaction involving a LLC, which would survive as a separate legal entity after the acquisition, and a limited partnership which would terminate and not exist as a separate legal entity after the acquisition as it would only have one member. (more…)