Saturday, January 29, 2011

Finally ...

... after nearly three months of law, law, law there is touchdown.

A connection to the me that was.

My prior life. The one in the steel and glass scrapers of the sky in Manhattan. Connection.

Now it is personal. And maybe, just maybe, there is a place for me after all as an integral part of a legal team. God, I was hoping.

Corporate law. Commercial transactions. Litigation of perfected priorities, ownership rights, use of intellectual property.

NOT, and I repeat NOT, prostituting the courts with personal melodramas of "he said, she said, and I don't care what you said because I am right" and who the hell really cares?

Or the proliferation of product liability cases where ... of course, dumb ass, if you stick your penis in a vacuum hose for a thrill that you'll get that jolt ... it just might be electric in the real sense of the word. Gheesh.

So now it hits home. My home. Yay. A discussion question on the online boards re just what floated my professional boat three decades ago. The germination of my interest, nay passion, in consummating a deal. The thrill of the negotiations. The exhilaration of closure. Ahhhh!

Having spent years on the proverbial other side of the table as senior lender syndicating mega-million dollar credit facilities among multiple money center banks, the due diligence that I undertook coupled with the preparations for these humongous closings took considerable time and the coordination of a team of many, many players.

Always, and I mean always, these deal ran to the wire. The last possible moment before the deal fell apart due to expiration dates on purchase agreements, etc. Invariably these were on a Friday. Or the last day of the month. And more than I care to remember, the last day of the calendar year. Goodbye week off between Christmas and New Years. Hello prickly sofa in a Wall Street law firm in between rewrites of documents being negotiated to the 11th plus hour.

And, all of these HAD to be signed, sealed and delivered (i.e., UCCs files in multiple jurisdictions, mortgages recorded and released if necessary, etc.) BEFORE funds were wired anywhere. And with a 2 PM cutoff, it made for a hectic, exhausting but somehow energizing final few hours. And to top it off, more than a few deals also involved assets being secured in Louisiana where French law is still in place. Don't even ask!

So here I am on the legal team. Not the client. And wow, there is as much due diligence, if not more.

Steps I'd take to conduct and finalize DUE DILIGENCE for a $10,000,000 secured revolving credit would entail:

-- Discuss terms of deal, parties, jurisdictions, timeline with my supervising attorney.
-- Start a file for all documents in preparation for the closing and to satisfy the opinions to be expressed in our law firm's Opinion Letter.
-- Create a Due Diligence checklist based on the discussion with the supervising attorney, the term sheet, etc. to be used also as a basis for the Closing Checklist and Closing Books.
-- Review term sheet, bank's letter of intent, Bank's commitment letter for deal specifics (amount, rate, term, maturity, repayment schedule, prepayment penalties, assets to secure facility, negative and affirmative covenants, reps and warranties, personal guarantees (if any).
-- Determine salient facts of transaction.
-- Review financial statements of entity and personal guarantors.
-- Confirm business entities involved actually exist and are in good standing in states of organization.
-- Check to ensure that if they are operating in multiple states that they have duly registered as foreign corporations and entitled to do business there.
-- Review bylaws and actions of the board to ensure that entity is empowered to enter into the credit facility and can encumber its assets.
-- Also for signatories who will execute documents. They must be empowered by board and duly authorized to sign on behalf of the entity to pledge assets, borrow funds, etc.
-- Identify and review financial statements of parties.
-- Identify and review all assets of parties to ensure they exist where they are said to (inventory, A/R, deposits, equipment, buildings, etc.)
-- Review licensing agreements and other IP for changes of control, transferability, assignment issues.
-- Order UCC and title searches.
-- Prepare UCC-1 and mortgage filings.
-- Keep copies of all documents received and provide draft (version) control for all red-lined changes in security agreement, etc.
-- Blah, blah blah

In essence, my responsibility is to ensure that based on due diligence and proper filing of all financing documents that all is accurate and there are no errors or omissions. That the senior attorney on the case can opine as to the points in the letter to the client. Daunting to say the least!

For the CLOSING, I would prepare the following:
-- Closing Checklist of all documents needed to be signed
-- Stickies on all documents (and enough signature pages for multiple copies) where signatures and dates are required
-- Copies of all documents from due diligence phase together with recording and filing documents (UCC-1s, Mortgages) in order so that they can be accessed or referred to as needed during the closing.
-- Verification of time and date and location filings are recorded before funds can be wired. This is critical.
-- The completed file will serve as the basis of the Closing Books.

Whew ... and it is not over yet. Follow up on open items with copies (and conformed copies) of signature pages or pages with initialled changes included in respective document.

And I am certain I left something critical out of the mix. But hey ... at least I am back in the game. Sidelined no longer.

Cheers to new beginnings and the everlasting ability to reinvent my professional self ... and why my musings have been delayed since October!!


  1. Congratulations!!! so glad you're back btw... got worried for a little bit
    - Sy

  2. Thank you, darling Sy, day tripper extraordinaire, for your patience. Promise to catch up. And will try not to disappoint. Cheers!