Compliance interpretation of request for premerger clearance: Imminent bankruptcy

No. 179. Compliance interpretation of request for premerger clearance: Imminent bankruptcy.

The Commission issued an opinion October 28, 1964, in collllection with a request for advice from a small company as to whether its proposal to merge with any other company in the same field would, if consummated, be in violation of Section 7, amended Clayton Act. small food products mmlufacturer applied for advice from the Commission regarding the possibility of selling out to any other com. pany operating in the SaIne field, particularly to a large processor in the same products line. The larger producer was subject to a, Commission order prohibiting such acquisitions for a clesig11ated period of time without prior COll1Jllission approval.

It ",Tas presented that the requesting compa.ny had made reasonable but lUlsuccessful attempts to locate a purchaser otller than the larger company, and moreoyel' 'Tas on the verge of bankruptcy. On the basis of a.vailable information, but primarily because of the equities affecting the requesting compa.ny s position in the industry, the Commission a.dvised that an acquisition by another producer in the same field would not. be in viloation of Section 7; amended Clayton Act, and in the event a sale is made tOR conlpany which is under Commission order requiring approval of such acquisition, said approval would be granted.

In clearlllg the proposed sale the Comll1ission pointed out that the approval might be reconsidered, revoked or rescinded if it subsequently appeared the facts submitted were lllaccurate, incomplete or that they had changed at the time a sale was made. (File No. D-6652, released Feb. 13, 1968. ) (Opinion issued lUlder authority of Section 3. 61 ( c) the Commission s Rules of Practice (1967).