July 21, 2014

Getting to the Finish Line: Avoiding Gun-Jumping and Other False Starts in Preclosing Antitrust Compliance

By Robert McCann, Kenneth Vorrasi and Kristin Laubach

Washington, D.C., partners Rob McCann and Ken Vorrasi, along with incoming associate Kristin Laubach, have authored a new analysis of pre-closing antitrust compliance obligations for health care organizations involved in affiliations, mergers, and joint ventures.  The analysis appears as a chapter in the newly-published 2014 Health Law Handbook.

In the chapter, titled “Getting to the Finish Line: Avoiding Gun-Jumping and Other False Starts in Preclosing Antitrust Compliance,” Rob, Ken and Kristin provide background on antitrust compliance issues and strategies that reside in the many business relationships discussed in relation to mergers and other large-scale corporate consolidations.  In particular, this chapter focuses on the pre-closing behaviors that can influence the course of an antitrust investigation.

The exchange of information among parties is both necessary and inevitable.  Rob, Ken and Kristin write that “It is critical to the valuation, negotiation, planning, and execution of any transaction, whether a merger, acquisition, strategic affiliation, or joint venture.” 

The chapter points out, however, that in undertaking pre-closing negotiations and planning for post-closing operations, too much coordination may be viewed as  “gun-jumping” and a violation of the Hart-Scott-Rodino (HSR) Act, Section 1 of the Sherman Act, or Section 5 of the Federal Trade Commission Act.  The authors stress the importance of health care firms engaged in these transactions remaining independent actors until the transaction has been consummated.   

The chapter concludes with an in depth look at the management of documents and information, both historical and transactional-specific, as a critical element of antitrust compliance and transactional strategy.  

This is the 26th issue of the Health Law Handbook, which is compiled by national health law experts.  It has long been considered an important resource on cutting-edge issues in health law.  The 2014 edition of the book includes 13 chapters, covering fraud and abuse, protecting health information, provider alignment, physicians and non-physician practitioners, Medicare secondary payer law and health care facility leases.  (To read the chapter, click here.) 

For more information on the publication, please contact one of the authors listed above or a member of the Drinker Biddle Health Care Industry Team.

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