FTC Provides New Guidance on Antitrust Review of Leveraged Buyouts

On Oct. 6, the Federal Trade Commission’s (FTC’s) Premerger Notification Office (PNO) provided updated guidance on how to calculate the size of leveraged buyout transactions to determine whether they need to be reported for antitrust clearance under the Hart-Scott-Rodino Act. Historically, if the buyer took on new debt for the transaction, that debt counted toward the size of the transaction, but if the target took on that new debt, it did not. Going forward, however, new debt used to finance a leveraged buyout will be included in the size of the transaction regardless of which party takes on the debt. The PNO’s guidance included several examples demonstrating and applying this new approach.

Executive Extradited to U.S. to Face Charges of Fraud, Falsified Bids

On Oct. 14, the U.S. Department of Justice (DOJ) announced that a former executive of two Israeli defense contracting firms had been extradited from Bulgaria to face charges of orchestrating multiple schemes to defraud a U.S. foreign military aid program and laundering some of the proceeds through a relative’s U.S.-based company. The 25-page, five-count indictment details complex schemes allegedly involving false representations of competitive bidding, undisclosed and concealed commission payments, and false claims that services were provided by U.S. vendors. These individual charges follow non-prosecution agreements reached with two U.S.-based defense contracting firms allegedly involved in the schemes. Both firms agreed to pay monetary penalties and restitution to the U.S. Department of Defense. This case, currently pending in the U.S. District Court for the District of Connecticut, is the latest in a growing list of cases in which U.S. authorities have successfully extradited non-U.S. nationals to face antitrust or competition-related criminal charges.

DOJ and FTC Issue Antitrust Guidance for HR Decision-Makers

As reported in our recent Legal Update, on Oct. 20 the DOJ and FTC jointly issued Antitrust Guidance for Human Resource Professionals, an 11-page overview of the interaction between the federal antitrust laws, and the hiring, compensation and benefits decisions of private employers. The agencies’ guidance covers not only “no-poaching” and wage-fixing agreements, which it explains are per se illegal, but also the potential civil liability inherent in sharing competitively sensitive information, even in the absence of any agreement. The agencies’ guidance was accompanied by a two-page primer of Antitrust Red Flags for Employment Practices.