Given the current legal scenario the merger and acquisition sector is booming but this, as it is, should be a point of concern. More and more companies are going for mergers due to specific reasons and the modern economic conditions along with the temperamental tendencies of a few governments. That is why it is needed that you follow absolute care and caution if you are thinking along the lines of the merger. You must know about the intricacies, the consequences, the meaning and the working process of merger and acquisitions. Along with these, you must know the pros and cons and make the right decisions.
There are a lot of legalities and rules to follow in such situations which is why you must team up or at least consult with experienced and reputable M&A Lawyers in India to avoid legal hassles and litigation in the future. To have a better insight, start with the basics by understanding the litigation practice in merger and acquisitions.
Type of litigation
The litigation practice involving mergers and acquisitions ideally includes copious types of proceedings and claims. The most common types of litigation involve:
- Suits by stockholders who seek to enjoin or challenge any proposed merger and acquisition transaction
- Alleging unfairness in the transaction price
- Detecting flaws in the transaction process
- Deficiency in disclosures linking to the transaction
- Suits by one party of the transaction to enforce rights
- Demanding the other party to comply with the obligations
- Drafting of operative agreements
- Legal claims raised and much more.
All these types of litigation in merger and acquisition implicate corporate as well as fiduciary law. It also involves contract principles, federal securities laws, expedited measures to decide the claims and much more.
These are done at the preliminary basis and are resolved before the transaction is closed and submitted to a stockholder vote. As the transactions are very large, merger and acquisition litigation often requires large teams of lawyers. These lawyers can be from one single firm or different Mergers and acquisitions law firms but must have a significant amount of expertise and experience in M&A transactions and other related agreements.
Moreover, as there are different corporations and different types of entities involved in these cases are often complex and must be settled at the highest possible and applicable legal standards.
Jobs of the lawyers
Ideally, the merger and acquisition lawyer will run and determine the deal. The lawyer will deal with all the parties involved and their advisers acting as the hub in this hub-and-spoke system. Serving as the primary and single point of contact for all who are involved in the deal, the lawyer has the principal responsibility of shepherding the entire transaction right from its inception to closing.
Though you can use an in-house attorney for this purpose but hiring one of the best Mergers and acquisitions lawyers is recommended to close the deal successfully. When you hire such a lawyer look out for the core competencies and skills that must include:
- Strategic thinking for your benefit
- Multitasking to ensure faster closing
- Negotiation for a better deal
- Delegation of the right and most fruitful process
- Organization to prevent miss outs
- Complex drafting of contracts and agreements
- Attention to every minute detail and
- Ability to work quickly.
The lawyer must have substantial knowledge of all legalities and its requirements according to the contract, corporate, and fiduciary duties law of the state. It is also required to have adequate knowledge of the federal securities law as well. Apart from all these, the lawyer must have the following qualities:
- Knowledge of corporate finance
- Environmental law
- Secured Lending
- Taxation laws
- Employment and labor law
- Executive compensation and other benefits
- Real estate
- Intellectual property
- Antitrust and anti-corruption
- Commercial law and much more.
Therefore, a merger and acquisition lawyer will look after virtually every aspect of the transaction without actively participating in setting purchase price or post-closing integration.
The specific functions
Specific functions of m&a law firms or a lawyer are varied and extensive. These functions include:
- Preparing the target company for sale
- Ensuring corporate formalities are duly adhered to
- Maintain supplier and third-party vendor relationships as required
- Formalizing and identifying areas of potential risk and if need taking steps to mitigate
- Negotiating with a financial adviser
- Drafting engagement letter, confidentiality agreement or a letter of intent
- Working with financial and tax advisers to structure the deal
- Conducting and facilitating legal due diligence
- Preparing the memorandum of due diligence or other summaries
- Creating a comprehensive checklist for implementation and identification of all necessary actions
- Drafting the principal transaction agreement after proper negotiation
- Crafting appropriate warranties and representations, covenants and disclosure schedules
- Advising the buyer as well as the target boards of directors and management regarding fiduciary duties
- Identifying conflicts of interests, rights of minority shareholders and dissenters following higher standards of scrutiny
- Reviewing and commenting on the fairness opinion of the financial adviser
- Advising the parties regarding disclosure obligations as per the securities laws
- Drafting documents such as Form 13Ds, proxy or information statements, press releases, Form 8-Ks, and tender offer
- Providing tactical advice during the entire process
- Managing any specialist attorneys and incorporating their comments
- Drafting any ancillary documents such as bill of scale, exclusivity agreement, escrow agreement, legal opinion, assignment or assumption agreement, and transition services agreement
- Coordinating with all proxy solicitors
- Working with the antitrust counsel to prepare HSR filing
- Advising and implementing defensive procedures to dissuade hostile takeover attempts
- Advising on proxy contests
- Preparing shareholder rights plans or poison pills and
- Identifying the requirements of third-party consents.
It is a huge list and therefore a huge responsibility on the shoulders of a merger and acquisition lawyer.
Help for buyers and sellers alike
The job responsibility of the merger and acquisition lawyers is to provide help to the buyers as well as the sellers alike.
Help that these lawyers provide to the sellers in different areas includes registering the sell deals and managing it proficiently. Uploading or downloading of related documents, provide professional support in disclosing deal information and even online negotiations via chat.
As for the buyers, the lawyer will help in searching deals, sending information, online negotiations.
Amy Jones is a professional legal expert working with Ahlawat & Associates. A company that provides Startup legal services India in a convenient manner. She is a passionate writer and loves to share business related tips.