LexisNexis partners with leading practitioners from across the country to develop Lexis Practice Advisor® practical guidance for transactional matters. Periodically InfoPro highlights the practical insights developed by these attorneys on specific topics in their area of expertise. These insights can be shared with your attorneys, used in your newsletters and on your intranet.
The Fee Letter Banking & Finance Insights by Sherry Mitchell
As all attorneys know, fees in any given transaction are heavily negotiated at the onset of a transaction. As the name suggests, the fee letter sets forth the various fees that will be paid to the arranger and agent. Such fees can include underwriting fees, agency fees, ticking fees and breakup fees. Importantly, the fee letter may contain market flex provisions. Market flex provisions permit the arranger to restructure the debt, increase pricing or resize commitments in order to facilitate a successful syndication. The parties usually define what constitutes a “successful syndication” in the fee letter and also set an outside date on when market flex rights can be exercised (usually no later than 60 to 90 days after the closing date).
Learn more about the fee letter:
Sherry Mitchell, Esq., head of Lexis Practice Advisor® Banking & Finance, brings eleven years of experience to LexisNexis®, joining the team from Clifford Chance U.S. LLP.
Plan of Reorganization Bankruptcy Insights by Cody Tray
The plan of reorganization and disclosure statement in a Chapter 11 case are the culminating documents of the entire case and greatly impact whether or not the case as a whole is successful and whether the various parties-in-interest receive their respective payouts. The top priority when creating a successful plan is the formulation of an exit strategy and ensuring that the exit strategy falls within the constraints of the confirmation requirements of section 1129 of the Bankruptcy Code. Keeping these requirements in mind is essential when advising clients on plan matters.
Learn more about plan of reorganization:
Cody Tray, Esq., head of Lexis Practice Advisor® Financial Restructuring & Bankruptcy, brings nine years of bankruptcy experience to LexisNexis®, including experience at Davis Polk & Wardwell LLP and a clerkship with the Honorable Robert E. Gerber, SDNY Bankruptcy Judge.
Formation of a New Jersey Business Corporation
Business Insights by Eric Bourget
New Jersey is home to some of the largest business corporations in the United States, including Johnson & Johnson, Prudential Financial and Honeywell International. The business corporation (or for-profit corporation) is a common structure for a business seeking to limit the liability of its owners. Essentially, it is an artificial person, vested with certain rights and privileges and responsible for its own debts and liabilities. Incorporating in New Jersey may be appropriate if the business maintains its principal headquarters in New Jersey or conducts a substantial amount of its work in New Jersey. If neither of these criteria is met, there is likely no strategic nor tax advantage to incorporating in New Jersey.
Learn more about the formation of a New Jersey business corporation:
Eric Bourget, Esq., Lexis Practice Advisor® Team Lead and Group Director of Specialized and Corporate offerings, brings ten years of both private and in-house practice experience to LexisNexis®.
Drafting Escrow Instructions and Closing Real Property Transactions
Escrow instructions are written instructions to the escrow holder (often called an “escrow agent”) about the steps to be taken to close a particular real estate transaction. Sometimes purchase agreements will include escrow instructions and require that the escrow holder sign the purchase agreement to acknowledge its duties under the purchase agreement. But even where escrow instructions are included in the purchase agreement, the parties will often provide supplemental instructions to the escrow holder that include more detailed instructions regarding the closing process. In addition, sometimes escrow holders will have additional terms (sometimes called “general provisions”) that they require the parties to sign before they will agree to act as the escrow agent. Some of the general provisions may be duplicative of the provisions already addressed by the parties in their purchase agreement or supplemental escrow instructions, while others are intended to limit the escrow holder’s liability for actions taken by it in its capacity as escrow holder. It is important to read any general provisions carefully and to delete or modify anything that is inconsistent with the terms of the purchase agreement or the supplemental instructions provided by one or more of the parties.
Learn more about drafting escrow instructions and closing real property transactions:
Complying with Negative Option Marketing Regulations IP & Technology Insights by Lindsay Bringardner
Negative option marketing is a popular marketing offer where the seller/marketer interprets a consumer’s failure to affirmatively reject an offer as assent to enter into an agreement with the marketer. In these negative option offers, a consumer’s silence is considered acceptance of the marketing offer. While such offers have benefits to both consumers and marketers alike, including reduced product and operating costs, negative option marketing opens the door for deceptive marketing practices, as some consumers may not even be aware they are entering into an agreement. Several laws govern the regulation of negative option marketing offers to protect consumers against deceptive marketing practices, and the FTC has provided guidance to marketers on what measures are necessary to comply with the regulations.
Learn more about complying with negative option marketing regulations:
Lindsay Bringardner, Esq., head of Lexis Practice Advisor® Intellectual Property & Technology, brings twelve years of legal experience to LexisNexis®, including experience at Latham & Watkins LLP and Pryor Cashman LLP.
Social Media and Employment Contracts Labor & Employment Insights by Carrie Wright
The popularity of social media has magnified the risks that employees and former employees will disseminate confidential information, damage an employer’s brand, and solicit an employer’s customers and current employees. Careful drafting of settlement, separation and restrictive covenant agreements can mitigate these and other perils.
Learn more about social media and employment contracts:
Carrie Wright, Esq., head of Lexis Practice Advisor® Labor & Employment, brings nearly fifteen years of legal experience to LexisNexis®, including experience at Epstein Becker & Green, P.C., Paul, Weiss, Rifkind, Wharton & Garrison LLP and Rabinowitz, Boudin, Standard, Krinsky & Lieberman, P.C.
Working Capital Purchase Price Adjustments M&A Insights by Dana Hamada
Drafting a working capital adjustment provision is never straightforward. Parties will typically agree to a definitive “working capital peg” amount prior to closing. This peg amount is based on the historical operation of the business, as reflected in the target business’s balance sheet at the time of the initial estimate. The acquisition purchase price is adjusted at closing depending upon the variance of the working capital estimated at closing with the peg amount, and subsequently adjusted post-closing, measured against a definitive balance sheet.
Learn more about working capital, purchase price adjustments:
Dana Hamada, Esq., head of Lexis Practice Advisor® Mergers & Acquisitions, brings a wealth of legal experience to LexisNexis®, joining the team from Jenner & Block LLP and Gibson, Dunn & Crutcher LLP.
Construction Lien Laws in the United States Real Estate Insights by Richard J. Sobelsohn
A construction lien is a security interest in real property in favor of a contractor, subcontractor or material supplier who has provided labor or materials to improve such real property. The right to file and enforce a construction lien is a statutory remedy available to protect contractors in each of the 50 states and the District Columbia. Construction lien laws differ from state to state, and a contractor must strictly adhere to the requirements of the applicable lien law to avail itself of this remedy.
Learn more about construction lien laws in the United States:
Richard J. Sobelsohn, J.D., GGP, LEED Accredited Professional, Team Lead and Group Director of Lexis Practice Advisor® Financial Practice Area Modules, brings almost sixteen years of both private and in-house practice experience to LexisNexis®.
Distinctive Characteristics of Tender Offers Securities Insights by Ron Llewellyn
A tender offer is an offer made directly to stockholders of a company to purchase their shares of the company in exchange for cash, securities or a combination of cash and securities. They have characteristics that set them apart from one-step mergers, and unlike mergers, tender offers are subject to federal securities laws and regulations under the Williams Act of 1968. Learn more about distinctive characteristics of tender offers:
Ron Llewellyn, Esq., head of Lexis Practice Advisor® Securities & Capital Markets, brings a wealth of expertise to LexisNexis®, including experience at Skadden, Arps, Slate, Meagher & Flom LLP, MasterCard Incorporated and Saks Incorporated.