10 Things You Need to Know About Making Your Transaction Run

10 Things You Need to Know About Making Your Transaction Run SmoothlyMay 3, 2011Presented by: Ted Shoub and Charles Rich 1

10 Things1. Establishing a relationship between Lawyers and Client2. Establishing a cooperative relationship with the other side and their counsel3. Determining the Priorities of the Parties4. Mapping out the Transaction5. Managing Timing Issues 2

10 Things (cont)6. The Proper Role of Due Diligence7. Winning Over Third Parties8. Addressing Multi‐Jurisdictional Issues9. Effective Negotiation of Documents10. Overcoming Obstacles to Closing 3

1. Establishing a relationship between Lawyers and Client• Know your client• Share the load• Don’t forget to tell your lawyer• Advice for effective communication between lawyer and client 4

2. Establishing a cooperative relationship with the other side and their counsel• How to break down barriers and establish trust• Do unto others as you would have done unto you• Keep calm and carry on 5

3. Determining the Priorities of the Parties• Thoroughness, speed and price – you can’t get all three – Thoroughness: a continuum from necessary risk management to perfection – Speed: closing quickly may come at the risk of thoroughness • What questions should you ask? – Costs and legal fees 6

4. Mapping out the Transaction• Slowing down can allow your transaction to move faster• Never forget tax – Make sure your transaction is structured to work from a tax perspective – Domestic tax issues – Cross‐border transactions involving multiple tax regimes• Other legal issues that may take time to resolve• Determine necessary consents and regulatory approvals• Determine required documents 7

5. Managing Timing Issues• What is beyond your control? – Third parties – Shareholder approval – Approval by Board of Directors• Set deadlines• Keep people moving – Tips for managing the process and keep things moving forward 8

6. The Proper Role of Due Diligence• Conduct a cost/benefit analysis – Due diligence can be costly – You may wish to consider other ways to manage risk• Share the load• Communicate the results• Determine action required 9

7. Winning Over Third Parties• Third parties don’t care if you close – Third parties include banks, unions, landlords, regulators, creditors, insurance companies and brokers – Varying levels of interest in cooperating – May see an opportunity to extract a concession or get out of a prior agreement• Should lawyers be involved at all? 10

8. Addressing Multi‐Jurisdictional Issues• Don’t assume things work the same way in other jurisdictions• Use of documents in other jurisdictions• Legal opinions, conflicts of law, enforceability• Choice of forum and governing law 11

9. Effective Negotiation of Documents• Determine what issues are important to the client• Understand the relationship between the client and the other side• Ensure clients read the documents• Review documents together before discussing with the other side 12

10. Overcoming Obstacles to Closing• Undertakings• Guarantees, security, letters of credit• Indemnities• Escrow arrangements• Earn outs• Representations and warranties insurance 13

Thank‐you/Questions?Ted Shoub Charles Rich416.862.3401 416.863.4606ted.shoub@fmc‐law.com charles.rich@fmc‐law.com

The preceding presentation contains examples of the kinds of issues companies entering into major transactions could face.If you are faced with one of these issues, please retain professional assistance as each situation is unique.

10 Things You Need to Know About Making Your Transaction Run

by FMC Law on May 05, 2011

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10 Things You Need to Know About Making Your Transaction Run — Presentation Transcript