Canadian M&A Perspectives Private and Public Mergers & Acquisitions | Private Equity

Monthly Archives: March 2012

Five Considerations for Borrowers Completing a Disposition

Posted in Contractual Matters

In my prior post, Seven Considerations for Borrowers Completing an Acquisition, I described seven key issues that borrowers should consider when completing an acquisition.   Similarly, if your company is considering a disposition (either of assets or of shares) and is a borrower under a credit facility, it is important to consider whether the proposed disposition will result in a breach of any of the provisions of your credit documentation.  Here are five key questions to ask when undertaking a disposition:

  1. Is the disposition permitted under the credit agreement? Many credit agreements contain negative covenants that prohibit dispositions without consent
  2. Continue Reading

Once Sold, D&O Liability Doesn’t Stop

Posted in Private Transactions, Public M&A

When a company is sold in an M&A deal, directors and officers remain exposed to claims with respect to activities pre-acquisition. Therefore, D&Os have a lot to worry about when their company is being sold. To protect themselves, D&Os on target boards should try to negotiate the purchase of a run-off D&O insurance policy with the acquiring company before the sale is complete, while they still have some bargaining power left.

Run-off policies are a one time purchase which last for a set duration (typically six years) and usually cannot be cancelled or amended once purchased. Sometimes D&Os will have … Continue Reading