100 Issues to Clarify with your M&A Counsel_Fletcher-Gottfried_ACC_ACC Docket_May_2011
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Transcript of 100 Issues to Clarify with your M&A Counsel_Fletcher-Gottfried_ACC_ACC Docket_May_2011
May 2011
INSIDE:Canadian Briefings
Worst: D&O Protection and the Major Corporate Lawsuit
M&A Counsel • Litigation 101 • Class Action Stats • Records Management
Early Data Assessment • Social Media & Employees • Valuing Litigation
Preparingfor the
BY FRANK FLETCHER AND KEITH E. GOTTFRIED
You are in-house counsel at ACME Manufacturing Corporation, a leading publicly held manufacturer of widgets based in California’s Silicon Valley with close to a $1 billion in market capitalization. As the only other in-house counsel at ACME other than the general counsel, your responsibilities include securities compliance, corporate governance and board matters. In addition, to the extent that ACME considers or pursues any mergers and acquisitions (M&A) transactions, given your past experience as an up-and-coming M&A lawyer with a prominent law firm based in New York City, you are also responsible for shepherding any such transaction and addressing the many legal issues that arise in connection therewith. Assuming that the M&A transaction goes further than a draft letter of intent or term sheet, you may also be responsible for managing the outside counsel that would be retained to represent ACME in connection with the potential M&A transaction.
ACC Docket 53 May 2011
ACC Docket 54 May 2011
While you recognize that your approach
to M&A is not optimal, there has not been
a compelling reason to alter it, particularly
given that all of the transactions have been
small, low-profile and relatively low-risk. It
has certainly not been lost on you that the
legal bills for ACME’s M&A transactions
have been much higher than they should be,
and you are often puzzled by the large num-
ber of lawyers assigned to small transac-
tions. It is also clear to you that many trans-
actions took much longer to negotiate than
should have been the case, as your outside
counsel was unduly intransigent with op-
posing counsel on a number of deal points.
Further, if you had been asked, you would
have indicated some of the deal points as
insignificant to ACME. Undoubtedly, your
outside M&A counsel has been success-
ful in having every acquisition agreement
include extremely one-sided, buyer-friendly
indemnification provisions — even though
you are a company that has never pursued,
nor had reason to pursue, a post-closing
indemnification claim against a seller. With
respect to one transaction, it took almost a
year to acquire a small company since the
respective outside counsel were constantly
at war with each other with no referee. By
the time the transaction was closed, the
products of the company acquired had lost
significant market share (and its pipeline
had shrunk significantly), and accordingly,
ACME’s ability to profit from the deal was
adversely affected due to the market shift.
Now your approach to M&A is about
to get its long overdue impetus for change.
The GC has just informed you that ACME
is about to embark on a review of strategic
alternatives to enhance shareholder value
that may include the possible sale of ACME. A major
investment banking firm has been retained to assist
the company in its review of strategic alternatives. The
near-term plan is for the investment bankers to initiate
an auction process and seek indications of interest from
potential buyers. An auction form of acquisition agree-
ment will need to be prepared so that potential buyers
can review and comment on it, and submit their marked-
up agreement with their indication of interest. The cur-
rent plan is to sell ACME in an all-cash public company
transaction pursuant to a tender offer by the buyer for
all of ACME’s outstanding shares. A tender offer has
The majority of the M&A transactions
that ACME has completed over the past few
years have been relatively small “nip and
tuck” acquisitions, typically structured as
either stock or asset purchases. None of the
companies that ACME has acquired have
been public companies, though a few of the
acquisitions were material enough to war-
rant a Form 8-K filing with the US Securities
and Exchange Commission (SEC). While
any M&A transaction can result in unin-
tended consequences, good or bad, none of
the completed transactions were of the “bet
the company” variety. None of these transac-
tions involved the use of investment bankers,
other non-legal advisors, nor any regulatory
or other government approvals.
Your modus operandi, which the general
counsel has not taken issue with, has typi-
cally been to rely almost completely on out-
side counsel to handle all of ACME’s M&A
transactions even though you have expert
M&A experience. After all, these transac-
tions have not been “bet the company”
transactions. Since the fees and expenses
of outside counsel for an M&A transaction
do not come out of your legal department’s
budget, there has been little incentive for
you to handle any of the legal work in-
house. As only one of two in-house lawyers
at ACME, you have numerous other in-
house responsibilities — some of which are
not, from a practical perspective, capable of
being outsourced to outside counsel. Nor is
there a budget for such outsourcing. Given
that your former law firm handles most of
the M&A transactional work, you have the
utmost trust and confidence in your outside
M&A counsel to perform due diligence, ne-
gotiate the acquisition and ancillary agree-
ments, prepare closing documents and close the transac-
tion. Periodically, you will review the draft acquisition
agreement to see what types of representations and war-
ranties ACME is being asked to give, and you may take an
interest in some of the indemnification provisions to make
sure that ACME is appropriately protected in case the
transaction turns into a “mini-disaster.” You might even
eyeball the disclosure schedules prepared by the company
that is being acquired. For the most part, however, you
rely on your former colleagues to do everything necessary
to get the deal done, and ensure that ACME’s interests are
appropriately protected and safeguarded.
FRANK FLETCHER is the general counsel of Nero AG, a developer of
platform-neutral software technology for editing and
managing video, music, photos and other multimedia. Headquartered in
Karlsbad, Germany, Nero has subsidiaries in Hangzhou, China;
Tokyo, Japan; and Glendale, Calif. Fletcher is responsible for all
aspects of the company’s worldwide legal function, including mergers and acquisitions, software
licensing, patents, trademarks, antipiracy and litigation. Prior to
joining Nero, he was a member of the products and technologies law group at Sun Microsystems where he served as chief counsel for the
CPU manufacturing, integrated circuit testing and validation, and
global business services groups. He is available at [email protected].� � � � � � � � � � � � � � � � � � � � � � � �� � � � � � � � � � � � � � � � � � � � � � � � � � � � �� � � � � � � � � � � � � � � � � � � � � � � � � � � � � �� � � ! � � � � � � " # � � � � � � � � $ � � � � � � � �! � % � � � � � � $ � � � � � � � � � � � � � % � � � $� � � # � � � � � � � � ! # � � � � � $ & ' ( � � �& � ( � ) � � � � � � � � � $ � � ! � � � � �� � � � � � � � � � � � � � � � � � � � � � � � � � � � � * � � � � � " # � � � � � � � � � � � � � + � � � � � ! �� � � � � # � � � � � � � � � � � � � � � � � � � � � � �, � � � � � ! � � � � � � � � � � � $ � � � � � � �! � � � � � � � # � � � � � � � � � - ( � � � � � � � �� � � � # � � � ! � � - � + � � % � � � � � � � � $ � � � � � � � � � � � � � � � � � � � � � � � � � � �+ � � � � � � � � � � � � � ! � . � � # � � � �# � � � � � # � � � � � � � � � � + � � � - (( � � � � � � � � % � � # � � � � � � $ � � � � � � � � �� � � � � � / � � � � � � � � ( � � � � � �/ � � � � � � � � � � � / # � � � � � � � $ / � � � � � � � � % � � + � � � * � � � � � ! � � � � � � � � 0 � � � � � � � � � �
ACC Docket 56 May 2011
— among other things — roles, responsibilities, expec-
tations, goals and objectives.
Based on our past M&A experiences, we have prepared
a list of 100 issues that should be clarified sooner rather
than later with outside M&A counsel, but are often not ad-
dressed, becoming silent “elephants in the room.”
Assessing qualifications of M&A counsel1. Understand whether M&A counsel have the
necessary competency, experience and depth for
the transaction you are contemplating. Ascertain
whether M&A counsel have experience with the type
of transaction structures that you are considering.
2. Understand whether M&A counsel have not only the
appropriate M&A expertise, but also the appropriate
expertise in any applicable specialty areas, such
as tax, antitrust, litigation, intellectual property,
government contracts and employee benefits.
3. Understand whether M&A counsel will need to
draw on additional legal resources from outside
their firm (e.g., local counsel, regulatory counsel,
Delaware counsel, international counsel, etc.).
4. Understand whether your M&A counsel have the
necessary industry expertise for the transaction
you are contemplating. If not, consider whether
industry expertise is relevant to your transaction.
5. Ask for copies of publicly-filed deal documents
(definitive acquisition agreements, SEC filings, etc.)
for precedent M&A transactions that members
of the proposed “deal team” have prepared.
6. Ask your investment bankers (if already retained)
whether they think your M&A counsel would
be a good fit for the contemplated transaction.
If the answer is no, ask them to recommend
a number of law firms for you to consider.
7. Understand how familiar your intended M&A
counsel is with your company. If historical
knowledge of the company is critical,
consider creating a role in the transaction
for your historical corporate counsel.
8. Confirm that M&A counsel have cleared conflicts
with respect to not just the company, but to all
third parties that may express an interest in a
transaction with the company as well. Also, confirm
that they have cleared conflicts with respect to
each director and officer of the company.
Staffing the transaction9. Understand how M&A counsel intends to staff
the transaction, for example, the mix of associates
and partners and the various legal specialties
that will be called upon from time to time.
the advantage of providing ACME’s shareholders with
a liquidity event earlier, and generally provides greater
certainty of closing, than a one-step cash merger. While
ACME’s board of directors wants to move quickly, the
sale of ACME will likely be a complicated and lengthy
M&A process. The GC has told you that you will be the
legal “quarterback” during this process, and will need to
take an active role in overseeing all legal aspects of it and
the possible transaction. For the next few months, this
M&A process, and any transaction that is derived from
it, will be your highest priority.
You finally have your “bet the company” transaction,
which means that allowing your M&A counsel to go on
“auto-pilot” is no longer appropriate. For the first time
since coming to ACME, you may actually need to draw
on your extensive M&A experience as you seek to man-
age your M&A counsel — making sure that there is a
clear understanding of ACME’s goals and objectives, and
the most optimal path to accomplish them. ACME can-
not risk having its sales process collapse because M&A
counsel got hung up on deal points that are insignificant
or irrelevant to ACME. The contemplated transaction is
also relatively complicated, and given that this is a large
public company transaction, there are fiduciary duty,
SEC compliance and regulatory approval issues that will
all need to be carefully and timely addressed. You are
naturally concerned that the outside lawyers who have
handled ACME’s M&A work in the past may not have the
appropriate depth and experience for the contemplated
transaction. Given the complexity of the contemplated
transaction, the M&A counsel deal team, which consisted
of a few lawyers in the past, would likely be significantly
larger as you will need to draw on lawyers from various
specialties. There is also the possibility that no transac-
tion may ever get done, and the company still ends up
with a huge legal bill. As such, careful management of
legal fees should also be addressed.
This scenario may seem familiar to many of you. Like
the fictional counsel for ACME, there are few situa-
tions that are more demanding and taxing on in-house
counsel than a “bet the company” or significant M&A
transaction. There are also few situations where out-
side counsel is required to develop a closer and more
intimate relationship with its corporate client and
in-house counsel than a significant M&A transaction.
While in-house counsel will typically be dependent on
outside M&A counsel for most of the day-to-day draft-
ing and negotiating of transaction agreements, and the
preparation of related SEC and other regulatory filings,
it is important that the relationship between in-house
and outside M&A counsel be appropriately clarified and
calibrated. This way, there is a clear understanding of
ACC Docket 57 May 2011
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Legal fees and expenses18. Understand whether M&A counsel would
consider discounting standard hourly rates.
19. Understand whether M&A counsel would consider
any alternative fee billing arrangements.
20. Determine whether to have M&A counsel comply
with any formal billing policy of the company’s
legal department with respect to outside counsel
fees (whether existing or to be created and
implemented). For example, will M&A counsel
bill for travel time or multiple attorneys attending
the same meeting? What about internal status
conference calls where multiple attorneys (but
not client representatives) are present?
21. Understand what kind of expenses M&A counsel
expects you to be responsible for (e.g., word
processing, fax and copy charges, secretarial
overtime, overhead allocations, etc.).
22. Consider whether to have M&A counsel
agree to your legal department’s expense
reimbursement policy, be it an existing one or
one that would be created and implemented
in the wake of this new matter.
10. Ask to have all the proposed lawyers identified
in advance and request copies of each of their
bios. Set up a notification or approval process
for new lawyers to be added to the team.
11. Ask to meet all the proposed lawyers before
proceeding with the chosen law firm.
12. Ask for a list with detailed contact information
for the day-to-day transaction-working group.
13. Ask for a list of recent precedent M&A
transactions for each of the proposed
lawyers to be assigned to the matter.
14. Understand which lawyers will be
responsible for the majority of the work.
15. Understand which lawyer will be your
primary day-to-day contact.
16. Understand whether the partner at the law
firm that “pitched” you for the role of M&A
counsel will be involved in the transaction, or
if he will pass it off to another colleague.
17. Inquire of any near-term commitments
(vacation, etc.) that may make one or two of
the key members of your M&A legal team
unavailable at an inopportune time.
ACC Docket 58 May 2011
Timing32. Explain to M&A counsel what the company’s
expectations are with respect to timing (e.g.,
timing of negotiations, board and other
internal approvals, signing of definitive
agreements, closing of transaction, etc.).
33. Discuss with M&A counsel whether the company’s
timing expectations are reasonable and/or realistic.
If not, discuss strategies for communicating
that to the board and/or management.
34. Consider whether to ask M&A counsel for
a detailed week-by-week timetable for the
completion of the transaction. Ask M&A counsel
to footnote any such timetable with a discussion
of circumstances under which such a timetable
may not be met. Discuss how often the detailed
timetable should be updated and circulated.
35. Discuss with M&A counsel how deviations
from the projected timetable will be
communicated and addressed.
Communication protocols36. Discuss with M&A counsel the protocols
for communications between M&A
counsel and in-house counsel.
37. Discuss with M&A counsel the protocols
for communications between M&A counsel
and the company’s non-legal personnel.
38. Discuss with M&A counsel how the internal and
external deal teams should best communicate
with each other and collaborate (weekly
conference calls, email, online document
work spaces, instant messaging, etc.).
39. Discuss with M&A counsel whether they should be
contacting individuals inside your company without
going through in-house counsel. At a minimum,
you should be copied on all such communications.
40. Discuss with M&A counsel whether they
should be communicating directly with your
CEO or CFO. At a minimum, you should
be copied on all such communications.
Chain of command41. Discuss with M&A counsel the chain of
command from the company to the outside
counsel, and clarify who outside counsel
should be taking its marching orders from.
42. Discuss with M&A counsel how the
chain of command will be communicated
to all involved parties.
23. Understand how often M&A counsel
will invoice you.
24. Clarify with M&A counsel how often you
expect to receive updates of fees incurred
(weekly, biweekly, monthly, etc.).
25. Consider whether to have your CFO meet with
M&A counsel to discuss anticipated legal fees.
Consider also that the more involved your CFO is
in the retention and fee negotiation process, the
less chance that you as in-house counsel can be
reasonably accused of blindsiding the executive
team with unanticipated costs. Also, your CFO
may be able to play the role of “bad cop” and
can put the “hammer down” for cost controls.
26. Consider whether to have M&A counsel
provide a forecast or budget for legal fees to be
incurred in connection with the transaction or
particular stages thereof (e.g., due diligence,
confidentiality and other preliminary agreements,
definitive agreements, SEC filings, closing of
the transaction, etc.). Would such a forecast or
budget be helpful? Would M&A counsel be held
accountable to such a forecast or budget?
27. Discuss with M&A counsel partnering opportunities
with your legal department as a way to reduce
fees and expenses.
28. Discuss with M&A counsel partnering opportunities
with your day-to-day corporate counsel, such that
any learning curve issues (and the fees that would
be incurred as a result thereof) can be avoided.
29. Discuss with M&A counsel whether it or the
company should consider retaining temporary
or contract attorneys as a way to reduce fees
and expenses. This could help to avoid unduly
consuming internal legal resources otherwise
needed to close the business transactions
that keep your company in business.
Retention of other advisors30. Discuss with M&A counsel the need for the
company to retain any other external advisors
(e.g., investment bankers, accountants
and auditors, valuation experts, etc.).
31. Discuss with M&A counsel who will be responsible
for reviewing and commenting on the engagement
letter agreements with other external advisors.
ACC Docket 60 May 2011
55. Communicate to M&A counsel the extent that
time is of the essence, and explain why.
Risks56. Discuss with M&A counsel the risks
(legal and business) to the company
of pursuing the transaction.
57. Discuss with M&A counsel the potential
litigation risks to the company (and the
board) of pursuing a transaction and the
risks of not pursuing a transaction.
58. Discuss with M&A counsel various strategies for
mitigating the anticipated risks to the transaction.
59. Discuss with M&A counsel whether any
insurance should be considered to mitigate
any legal risks of the transaction (e.g.,
representation and warranty insurance).
60. Discuss with M&A counsel the risks to the
company in pursuing a transaction. If a sale of the
company is being pursued, there is the possibility
of talent leakage as the process continues. This
can be mitigated, to some extent, by the adoption
and implementation of retention plans.
61. Discuss with M&A counsel the potential harm to the
company if the transaction is not completed. This
includes the fact that the acquiring company might
be a potential competitor, and during the course
of the due diligence process, your company might
provide very sensitive and confidential information,
which could affect the company’s ability to compete
with such competition if the deal is not completed.
Hurdles62. Discuss with M&A counsel the hurdles that the
transaction may need to surmount, including, but
not limited to, regulatory approvals, stockholder
approvals, third-party consents, SEC, etc.
Showstoppers63. Discuss with M&A counsel the potential
“showstoppers” that could cause
the transaction not to occur.
64. Discuss with M&A counsel strategies to
mitigate and avoid any “showstoppers.”
Industry overview65. Provide M&A counsel (and any other external
advisors) with an update on the company’s industry
and recent developments with respect thereto.
43. Clarify with M&A counsel who should be
perceived as the transaction’s quarterback —
the outside counsel or the in-house counsel.
Roles and responsibilities44. Discuss with M&A counsel how roles and
responsibilities will be divided between
in-house and outside counsel.
45. Discuss with M&A counsel whether valuation/
price discussions will be handled by an experienced
in-house team, the investment bankers, executive
management, specialized advisors or M&A counsel.
46. Discuss with M&A counsel who will have
responsibility for setting up and maintaining
the electronic data room –– outside or inside
counsel, paralegals or investment bankers.
47. Discuss with M&A counsel what documents
will be needed for the preliminary stages
of the transaction (e.g., confidentiality and
exclusivity agreements, term sheets and letters
of intent), and clarify who has ownership
over the initial drafting of those documents
and the timing for the preparation thereof.
Visibility of M&A counsel48. Discuss with M&A counsel how visible they should
be to the other side and when they should be
invisible. If the company has an experienced deal
team, then it might be reasonable for the in-house
team to be “front and center.” If the in-house deal
team is less experienced, then it might be reasonable
for M&A counsel to take a more prominent role.
49. Discuss with M&A counsel how visibility or
presence on a telephone call or meeting could
affect the dynamics of the discussions.
Goals and objectives50. Discuss the goals and objectives
of the transaction early.
51. Clarify with M&A counsel why the
company is pursuing this transaction.
52. Clarify with M&A counsel how the
proposed transaction syncs with the
company’s business strategy.
53. Clarify with M&A counsel what would need
to occur to make the proposed transaction
less attractive to the company and less of a
fit with the company’s business strategy.
54. Clarify with M&A counsel the extent to which
timing of the transaction affects, if at all, the
goals and objectives of the transaction.
ACC Docket 61 May 2011
Corporate Finance Mergers and Acquisitions Intellectual Property
Product Liability Defense Energy and Agribusiness Securities Litigation
Life Sciences Intellectual Property Real Estate
Bankruptcy/Financial Institutions Commercial Litigation Employment and Bene"ts
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(e.g., reluctance of some private equity firms
to commit to two-step tender offers and their
preference for one-step merger transactions).
Approvals71. Discuss with M&A counsel what internal
and external approval processes the
transaction may be subject to.
72. Discuss with M&A counsel what internal approvals
are required before proceeding (CEO, CFO, board,
significant or controlling stockholders, etc.).
73. Discuss with M&A counsel possible steps
that could be taken in advance to make
these approvals easier to obtain.
74. Discuss with M&A counsel whether the transaction
will be subject to the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 (HSR).
75. Discuss with M&A counsel whether any HSR
issues can be addressed up front to make sure
the deal is not delayed due to HSR issues.
76. Discuss with M&A counsel the timing and
mechanics for stockholder approvals (e.g.,
preparation and filing of a proxy statement).
Company overview66. Provide M&A counsel (and any other external
advisors) with an update on the company, its
products and services, go-to-market strategy, M&A,
corporate development, and other growth plans
and recent developments with respect thereto.
Transaction structures67. Clarify with M&A counsel the various transaction
structures that can potentially satisfy the company’s
objectives. Consider whether to involve other
C-level executives in these discussions (e.g.,
CFO, treasurer, corporate development, etc.).
68. Understand from M&A counsel the tax
consequences of the various transaction
structures under consideration.
69. Discuss with M&A counsel how the various
transaction structures under consideration
affect the timing of the transaction.
70. Discuss with M&A counsel how the various
transaction structures under consideration would
affect the ability of the company to attract a buyer
ACC Docket 62 May 2011
82. Discuss with M&A counsel any lead times
applicable to providing board and/or
committee members with briefing materials
in connection with an M&A transaction.
83. Discuss with M&A counsel whether in-house or
outside counsel will have responsibility for preparing
materials that will be distributed to the company’s
board of directors (e.g., agreement summaries,
fiduciary duty memos, reasons for transaction, risks
of the transaction, proposed resolutions, etc.).
Definitive agreements84. Discuss with M&A counsel what definitive
agreements would be customary for the
transaction structure being contemplated.
85. Discuss with M&A counsel whether in-house or
outside counsel will have primary responsibility
for the initial drafts of the definitive agreements.
86. Discuss with M&A counsel the timing for the
preparation of the initial drafts of the definitive
agreements.
87. Discuss with M&A counsel what process should
be followed for having the initial drafts of the
definitive agreements reviewed and discussed
77. Discuss with M&A counsel whether any
regulatory approvals or notifications will need
to be obtained or made in connection with
the transaction, and the timing thereof.
78. Discuss with M&A counsel whether any
third-party consents or notices will need
to be obtained or given in connection with
the transaction, and the timing thereof.
Board and governance issues79. Discuss with M&A counsel what board of
directors and governance issues will need to be
addressed as the transaction unfolds (the need
for board and/or committee meetings, board
presentations, board authorizations, etc.).
80. Discuss with M&A counsel the current schedule for
board and/or committee meetings and determine
the need for any special meetings to be scheduled.
81. Discuss with M&A counsel what fiduciary duties
will be applicable to members of the company’s
board of directors and what steps will need to
be taken to ensure that board members comply
with their fiduciary duties under applicable law.
ACC Docket
• Distressed Acquisitions: How You Can Create Value
During Difficult Times (April 2010). Read this article to
learn how to reshape the business with a well-structured
acquisition and restructured relationships with key
stakeholders. www.acc.com/docket/dis_acq_apr10
• Bet the Company: Litigation from a Policyholder’s
Perspective (May 2009). This article empowers policyholders
and offers guidance on how to persevere when litigation
hits. www.acc.com/docket/lit-ph-persp_may09
Quick References• Top Things to Know About M&A Involving Intel
Companies (April 2010). This article discusses the
top things to understand when undertaking the
acquisition of an intelligence agency contractor.
www.acc.com/quickref/m&a-intel_apr10
• Top Ten Indemnification Concerns in M&A Transactions
(Mar 2009). This ACC Top Ten focuses on the more
complicated side of indemnification concerns, which usually
is the business buyer’s side, of mergers and acquisitions.
www.acc.com/quickref/indem-m&a_mar09
Article• Look Before You Leap (Oct. 2010). This third edition of
Deloitte’s “Look Before You Leap” survey focuses on the
use of background/integrity checks when considering a
business relationship, investment or acquisition outside
of the United States. www.acc.com/look-leap_oct10
Resources• ACC Compliance Training Portal. The ACC Compliance
Training Portal provides information and resources
on a wide range of compliance issues that affect your
everyday professional life. With this helpful online
tool, you can provide the best ethics and compliance
advice to your client. www.ethicsxchange.com
ACC has more material on this subject on our website.
Visit www.acc.com, where you can browse our resources
by practice area or search by keyword.
The new GLD button lets you click to copy, print or email
a checklist from certain ACC online resources.
ACC Extras on… Issues to Clarify with Your M&A Counsel
ACC Docket 64 May 2011
SEC filings98. Discuss with M&A counsel whether in-house or
outside counsel will have primary responsibility
for preparing the initial drafts of the various
SEC documents that will need to be prepared in
connection with the transaction (e.g., Form 8-K’s,
proxy statements, tender offer documents, etc.).
99. Discuss with M&A counsel what SEC clearance
processes will need to be followed in connection
with the transaction and how those processes
could affect the timing of the transaction
and the choice of transaction structure.
100. Discuss with M&A counsel any open or past
SEC issues that could affect the timing of the
SEC’s review of any documents filed by the
company in connection with a transaction
(e.g., unresolved comments on your
company’s annual report on Form 10-K).
Shepherding the “bet the company” can be successful
Shepherding a significant or “bet the company” M&A
transaction can be one of the most exciting events in the
career of an in-house counsel. A tremendous amount of
additional responsibility is quickly placed at the feet of
in-house counsel, but with that responsibility comes the
opportunity to evolve and/or change the future of your
company forever, as M&A often does. Given the huge
amount of legal, logistical and other work involved in
driving an M&A transaction to successful completion,
it requires an intense amount of partnering between in-
house counsel and other internal colleagues, with outside
M&A counsel. We hope the 100 items listed above will
provide in-house counsel with a useful roadmap for those
issues that need to be clarified sooner rather than later
with outside M&A counsel. Following this roadmap leads
to a clear understanding of, among other things, roles and
responsibilities, expectations and goals, and objectives.∑
Have a comment on this article? Visit ACC’s blog
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with internal groups at the company. For example,
the representations and warranties with respect
to financial statements and other financial
information should be discussed with, and
reviewed by, the finance and accounting groups.
Disclosure schedules88. Discuss with M&A counsel whether in-
house or outside counsel will have primary
responsibility for preparing the initial
draft of the disclosure schedules.
Deal protection issues89. Understand from M&A counsel what deal
protection devices are available to the
company to protect the transaction.
90. Discuss with M&A counsel what the
current legal landscape is with respect to the
enforceability of deal protection devices.
91. Review with M&A counsel the strategic
players that might be expected to attempt to
interfere with any significant M&A transaction
that might be pursued by the company.
Transaction negotiations92. Discuss with M&A counsel who will have the lead
in negotiating the terms of the definitive agreements.
93. Discuss with M&A counsel what the
negotiating approach and strategy will be.
94. Discuss with M&A counsel which issues
in the definitive agreement are particularly
sensitive to the company and which are not.
95. Ensure M&A counsel have clarity on the
issues that the company does not want
to allow the deal to get hung up on.
Disclosure issues96. Clarify with M&A counsel when the company
would be required to publicly disclose that
it is pursuing an M&A transaction.
97. Clarify with M&A counsel whether the company
or outside counsel would be responsible
for preparing press releases and other
communications related to an M&A transaction.