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Ending an 11-day period when it declined to accept most Hart-Scott-Rodino Act notifications, the Department of Justice has re-opened its pre-merger filing office under tight security. HSR notices must be hand-delivered by employees of the in-house counsel or the outside law firm handling a deal, according to procedures adopted Nov. 8. Notifications sent via the mail, courier or overnight delivery services will be rejected. The Justice Department stopped accepting almost all HSR filings Oct. 29 in response to the detection of anthrax-laced letters delivered via the U.S. mail system. As part of a broader defense against anthrax attacks, Attorney General John Ashcroft banned all mail delivery to the agency. The antitrust division’s inability to accept almost all new HSR filings was never publicly announced. But antitrust lawyers said the ban lasted until about Thursday when the interim procedures were unveiled. The rules do not apply to the Federal Trade Commission. “Our procedures are remaining the same,” said Marian Bruno, an assistant director in charge of the FTC’s pre-merger notification office. Antitrust lawyers criticized the Justice Department’s decision to decline HSR filings, saying the agency rejected alternative arrangements that would have let companies provide information to the antitrust division without raising security concerns. “I understand their angst,” one lawyer said. “But there were lots of solutions that could have worked.” Among these alternatives were filing all HSR notices with the FTC; temporarily empowering the FTC to conduct all initial merger reviews; accepting HSR filings by fax or e-mail; or permitting firms to deliver the notifications to other Justice Department facilities. The HSR Act requires companies to wait to close their deals until 15 days after filing for cash tenders and 30 days for stock deals. But the clock does not start running until both the FTC and the antitrust division are notified. “The fact that we could not make filing for 11 days was terrible,” another lawyer said. “It was unconscionable that [Assistant Attorney General] Charles James and the antitrust division shut down M&A in the United States.” This lawyer questioned if the Justice Department had the legal right to extend HSR waiting periods by refusing to accept notifications. That is unlikely to be tested because the agency may impose stiff fines for companies that close a deal before the waiting period expires. Still the lawyer said he doubts the department would win if a company did challenge it in court. A Justice Department spokeswoman said Friday the agency is continuing to process pre-merger notifications. “Because of recent events and the department’s law enforcement role in dealing with the war on terrorism, certain precautions were put in place to deal with mail delivery,” she said. “The division has worked on a case-by-case basis with parties to come up with alternative ways to make HSR filings. However, just yesterday the Department’s antitrust division announced on its Web site interim procedures to provide for HSR filings during this time.” She declined further comment. One observer questioned the practicality of options recommended by antitrust lawyers. Having the FTC serve as a middleman for filings would not prevent a terrorist from getting anthrax into the Justice Department facilities because the filings would end up at the antitrust division. Also, e-mail and fax are not practical alternatives for lengthy filings. Robert Schlossberg, a partner at Morgan, Lewis & Bockius in Washington, D.C, said the rule could be a boon for firms with D.C. offices. “Everyone who files a Hart-Scott now needs a Washington law firm,” he said. But Schlossberg also questioned whether the new rules would work because they impose tremendous burdens on the antitrust division. “What does this mean if the number of filings increases?” he asked. For a company filing HSR notices, the interim procedures require its legal representatives to contact the pre-merger notification office at (202) 514-2558 to arrange a drop-off time. They must present photo identification, complete a form identifying the documents being given to the Justice Department and pass through a metal detector. The filing and the accompanying documents must be packed by the law firm or in-house counsel that is delivering the packages to the Justice Department, the antitrust division said in its notice of interim procedures on its Web site. That means documents sent from outside Washington must be repackaged at the D.C. office of the law firm or corporation before delivery to the government. “No deviations from this policy will be allowed,” the antitrust division said. Copyright (c)2001 TDD, LLC. All rights reserved.

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