The U.S. Department of Justice (“DOJ”) has announced a proposed settlement in a lawsuit alleging that Legends Hospitality Parent Holdings LLC (“Legends”), a New York-based venue services company, violated the Hart-Scott-Rodino Act (“HSR Act”), which requires prior notification to and approval by the FTC and DOJ of mergers or acquisitions exceeding a certain threshold.
The department alleged that Legends caused the illegal pre-merger coordination by exercing operational control over elements of ASM Global (“ASM”), the venue management and services company that Legends would acquire, during the HSR waiting period.
The parties signed the agreement for the acquisition in November 2023. The HSR waiting period expired in May 2024. However, in December 2023, shortly after the signing of the acquisition and while the second request was pending, Legends and ASM entered into an agreement under which ASM would manage an city-owned arena in California for which Legends had won the management contract. Based on this, DOJ concluded that Legends had exercised operational control over ASM in violation of the HSR Act, emphasising that under the HSR Act, undertakings must remain separate and independent before closing a merger.
Finally, as part of the proposed settlement, DOJ has ruled that Legends must do the following:
(DOJ – 05.08.2024)
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