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taylor1234

Is a partial owner of a subsidiary governed by "MFC" in its own sales? vice versa?

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First post here and new to this world. Scenario: Company A is looking to purchase a share (e.g. 20%) in Company B. Is Company B governed by Company A's schedules and the Most Favored Customer policy? What about vice versa. If Company B already has a schedule, is Company A now governed by those prices? Neither company would be a subcontractor or vendor for the other. Two independent companies selling goods that may overlap. Would this come create any False Claim Act issues? I've researched and find cases where they go after the owner of a subsidiary but it is because of actions the wholly owned sub did, not because MFC extended to that company. Any help/direction is appreciated. 

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Most of this is a legal question. But to the extent I understand, you seem to be asking whether a 20 percent ownership creates an affiliation for compliance purposes. The answer is: it depends. My limited understanding is that a determination of affiliation (and/or control) is circumstance dependent, and that other factors (other than ownership percentage) may affect the determination. This is a question better asked of a knowledgeable attorney. 

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