int. prep.

Sale and purchase agreement (SPA)

legal contract that describes the outcome of key commercial and pricing negotiations and when signed, obligates a buyer to buy and a seller to sell a product or service.

what are derivitives

- financial contracts relating to underlying assets (such as securities or commodities). Examples include futures, which are agreements between parties to engage in a transaction on a predetermined future data at a specified price; and options, which give one party the right (but do not obligate them) to purchase or sell a product on a predetermined future data at a specified price. These derivatives can help companies to better predict future costs and mitigate the risk of adverse price movements reducing profitability (this is known as hedging risk). This in turn can facilitate more accurate financial planning.

How can a business minimise/stabilise costs:

- maximising economies of scale; integrating into the supply chain; outsourcing; offshoring; entering long-term contracts and utilising derivatives.

stakeholder:

-a person with an interest or concern in something, especially a business -people who are involved- consumers on either side -the people who live in factories

due diligence

-designed to expose any potential issues -Warranties and indemnities - used to protect the buyer from some or all the issues exposed during the due diligence process. Seller may give warranties that certain issues have been fixed or undertake to fix certain issues before the deal completes. The buyer may demand indemnities in respect of liabilities that have come to light as a result of the due diligence Disclosure - seller can then disclose against the warranties in order to avoid a claim for breach of warranty at a later date if elements of the warranties do not reflect the actual position of the target Further negotiation - if a seller discloses against a warranty and the buyer needs protection in light of this disclosure, the buyer may try to negotiate an indemnity or a reduction of the price to compensate for this issue. For issues that could give rise to costs that cannot be quantified in advance, indemnities may alleviate bidder concerns. Where the costs of a particular issue are more certain, reducing the purchase price may provide a better compromise. Where these type of mechanisms are insufficient, a bidder may simply decide to walk away. Liability caps - the seller is likely to then attempt to negotiate caps on liability, for instance de minimis provisions, aggregate baskets of claims and de maximum provisions in order to reduce its potential future liability Basket clause: provides that a party who has given an indemnity will not have to pay out in respect of that indemnity until the other party's losses exceed an agreed amount. A basket can eliminate redress for relatively small claims, therefore helping to ensure that the indemnifying party will not have to carry out the burdensome administrative process of repeatedly paying out for proportionately small claims. De minimis clause: restrict the ability of an injured party to bring a claim unless that claim is worth at least a minimum specified amount, this prevents parties from having to spend time administering relatively trivial claims. De maximus cap: these place a cap on the maximum amount that can be claimed for particular breaches of contract, therefore limiting the potential liability of the parties.

Practice area: Dispute resolution/litigation/arbitration/Mediation

-involves building arguments based on legal research and factual analysis, discrediting the other side's statements, and preparing for and attending court. Matters can cover a broad range of issues including regulatory compliance, product or personal liability, media-related claims, insurance disputes and commercial fraud.

Combined value

: an investor could consider the additional value a target company could bring to their existing business. Does the target business complement their existing business in a manner that could increase the overall value of the newly combined company post-combination? Could a merger help an investor to reduce costs; acquire complement skill sets and expertise; reduce competition; or increase their overall influence in the market. If so an investor may be willing to pay a premium to acquire another business.

Underwriters:

: bond issues involve underwriters (investment banks) which typically agree (for a fee) to purchase all the bonds in advance and then sell them on to investors or to purchase any unsold bonds post issuance.

Future potential for business

: investors could consider the overall prospects of the market in which a business operates and whether any opportunities are likely to arise that will boost profitability. Growth projections for similar products, business and industries may also be taken into account.

The base rate/bank rat

: the interest rate the central bank charges to other banks · 0.25% since December 2021. Previously 0.1% · At historical lows

fixed charge

A charge on a particular asset or property- that are defined- land, a truck- not free to dispose

floating charge

A debt security issued by a corporation in which assets of the corporation, such as stock-in-trade, are pledged as security. Until such time as default occurs, the corporation is free to dispose of the assets- also control over future asset- floating charge becomes fixed after the charge crystalises-(the borrower becomes insolvent) If lender A takes a 'fixed charge' over Borrowers Z's factory, the agreement will likely include terms that prohibit Borrower Z from: 1) disposing of that factory without Lender A's consent and 2) granting security over that factory to other lenders before Lender A has been fully repaid. Whereas if Borrower Z instead grants Lender A a 'floating charge' over its assets, Borrower Z will typically remain free to sell the secured assets unless and until certain pre-specified events occur.

What is a shelf company:

A shelf company is a company that is already registered but has never traded or conducted business and holds no assets or liabilities. Essentially, the company is registered to sit on a 'shelf', waiting for someone to buy it. Buying a shelf company used to be the best way to quickly acquire a company without going through the time-consuming procedure of registering a new one. However, registering a company is now a lot faster and more cost-effective than purchasing and changing a shelf company. As a result, shelf companies are very rapidly becoming a thing of the past.

advantages of acquiring/merging/cooperating with other companies:

Access to new markets and customers: increases sells - Access to complementary resources: resources can enable firms to circumvent barriers to entry and compete more effectively - Economies of scope: collaborations that will enable them to diversify product range and can also improve a businesses product offering. - Efficiency: by combining and enlarging their operations it can enable them to buy, produce and sell in greater quantities, consequently giving rise to increase economies of scale and thus lower costs. Combine knowledge, expertise and resources could enable firms to increase operational efficiency and thus reduce internal costs. - Savings - Reputation - Innovation - Competition: increases market power

what do trainees do- non fee earning:

Admin: can include providing fee updates to clients and drafting or checking bill narratives before bills are sent to clients, filing emails, updating calender entries, submitting expense receipts, recording your time etc. - Client relationship/business development: assisting with research for client pitches/preparing pitch documents; drafting client newsletters/preparing client relationship reports; producing presentations/hand-outs on topics of interest to clients; and attending client events. - Knowledge management: includes preparing presentations on various 'training topics' and delivering these to other trainees/fee-earners; preparing internal presentations/handouts on relevant areas of law; and helping to produce, amend or file standard form documents. - Training/presentations: attending compulsory professional skills courses and compulsory/voluntary internal training sessions. - Corporate social responsibility: volunteering and probono

what to consider when choosing types of financing:

Assets: the extent to which a borrower has valuable assets over which security can be taken can determine whether a lender will be willing to lend Capital structure: the amount of debt a company has already taken on may affect the viability of different methods of financing. If a company has a high ratio of debt in comparison to equity, this means it is 'highly geared' and indicates it may lack sufficient assets to support debt repayments if additional debt is taken on. Lenders may therefore perceive highly geared companies as more risk borrowers and consequently charge them higher interest rates (or even refuse to lend them capital) The market conditions: if the value of the company is low, or it lacks a high profile or strong reputation, it may be unable to sell a sufficient number of shares or bonds at a price high enough to raise the required level of capital. Similarly, during an economic downturn, businesses in general perform less well which can reduce the willingness of investors to lend money at viable interest rates or invest in shares due to increased risk of businesses becoming insolvent or underperforming. Interest rates: are typically higher for borrowers with lower credit ratings. This is because lenders may demand a hiher premium to compensate them for the increased risk of such borrowers defaulting. This means debt financing may be less viable for companies with low credit ratings due to the potentially high cost of borrowing. Banks: issuing bonds may not be viable if investment banks are unwilling to underwrite the issue (due to low credit ratings). In addition banks may refuse to lend to firms lacking assets that can be used as collateral Restrictions: a company's existing debt agreements and/or articles of association may prohibit it from taking on further debt. On the other hand, existing shareholders may not approve a further issue of shares (e.g. a rights issue), especially if the company's earnings per share figure suggests that not enough profit is being generated to provide sufficient returns to all shareholders if additional shareholders are introduced. The company's articles of association may also restrict the extent to which it can issue further shares. Articles of association: a document drawn up by the founders of a company at the time it is incorporated. It defines the duties, obligations, rights, powers and limitations of the company, directors, shareholders and other members. Rights issues: where existing shareholders receive the option to purchase additional shares, usually at a discount, in proportion to their existing shareholding. This option enables companies to raise new capital whilst affording existing shareholders the opportunity to retain the proportion of ownership that they had held before the new share issue. Time frame: if a business requires short term funding or immediate access to capital, taking a loan or using cash reserves may be preferable to selling equity or issuing bonds, which in contrast is generally a long-term commitment and can take a long time to set up.

what do trainees do- fee earning:

Bundling: producing hard copy or electronic folders of documents, usually in connection with court proceedings or investigations. - Bibling: once a deal has completed, trainees are usually asked to create a 'transaction bible', which contains all or the main deal documents. - Document review: identifying documents that might be relevant/important for a litigation case. Due diligence. - Verification: refers to the process of checking statements made throughout a draft company prospectus (prospectus is a legally required document that must precede bond or share issues, advertises the issue to potential investors and contains information about the issuer's business, the potential risks and the issuing firm's financial circumstances, in addition to the terms and conditions of use. - Project management: responsible for coordinating a range of client-related workstreams. On a day-to-day basis this can involve chasing internal teams for input/advice; answering questions from other teams and advisors or clients; coordinating paralegals and PAs; keeping records; engaging and liaising with barristers, local counsel (i.e. law firms based in other jurisdictions) and project managing deal signings/closings (can involve ensuring all relevant documents are signed correctly. - Drafting: drafting and/or amending documents, including engagement letters, non-disclosure agreements, board minutes and corporate authorisations, power of attorney and a range of practice area specific documents. - Other transactional tasks: in transnational teams, trainees may get involved in - drafting companies house forms, incorporating or dissolving companies; carrying out regulatory/court filings; carrying out company searches, intellectual property related searches, real estate searches. Preparing legal step plans (setting out the processes that should be followed as a deal progresses) and structure diagrams (which set out the current structure of a company group and/or the proposed structure of a company group after a deal has completed. Research: can include research into a specific point of law; research into a company; research into legal processes/procedures and research into regulator guidance/proposed legal updates - Proofreading

stages of an acquisition:

Buyer protection: numerous ways in which lawyers can help clients mitigate this risk, such as seeking competition clearance in advance, conducting thorough due diligence and ensuring various contractual provisions are in place in favour of the buyer including warranties and indemnities. - Confidentiality agreement / Non Disclosure Agreement (NDA): These are designed to restrict and control a party's access to and use of sensitive/confidential information relating to another party. A seller will typically require a prospective purchaser to sign an NDA before granting them access to the data room. This is to ensure that the prospective purchaser is deterred from disclosing sensitive, confidential information about the seller/target that it discovers during the due diligence process, or using the information for a purpose unconnected to the proposed acquisition. - Assets: acquisitions will typically involve the transfer of tangible assets such as inventory, machinery, buildings and vehicles and intangible assets such as shares and intellectual property rights. Due diligence can ascertain which assets will be included and whether the seller has the legal right over the assets.

Financing a deal:

Cash advantages: owners retain full ownership and control of the business and its assets. No interest payments or dividends will need to be paid. Businesses can access their own capital immediately and without incurring hefty administration fees. Cash disadvantages: firms may not have enough cash to finance investment and maintain sufficient cash flow. Bank Loan: firms can borrow from banks and then pay back the loans in instalments plus interest. The interest rate can be fixed or floating, in which case the rate may be linked to the fluctuation of a benchmark interest rate (e.g. LIBOR), which could in turn end up costing less than fixed rate repayments if interest rates happened to fall. A bank may be persuaded to issue loan on the strength of a well prepared business plan, a strong previous relationship with the borrower, a financial guarantee from another party or a company's ability to provide collateral. Bank loans advantages: owners retain full ownership and control of the business as long as repayments are met. (lenders may be able to exert some control over a borrower's business through taking security over assets on terms that restrict the ability of the borrower to sell those assets. The money can be borrowed as and when it is required, meaning that the borrower may only have to make interest payments that reflect the actual capital in use. Interest payments made are tax deductible. Banks are more suited to complicated lending structures as they have extensive experience evaluating risk. They may thus be more inclined to approve financing and once a loan is approved, a business is generally guaranteed to receive the full amount immediately. Banks may however decide to hedge risk through releasing funds in instalments. This could prevent borrowers from using capital recklessly or for purposes not previously agreed - under such circumstances, borrowers may only qualify for new instalments once certain targets have been met. Furthermore, small loans are quicker and cheaper to arrange then bond or share issues. However, as mentioned, large, syndicated loans may be incredibly costly and complicated to arrange. Bank loans disadvantages: collateral may be required in return for a loan, typically in the form of an asset. If repayments are not met, lenders may seize and sell any secured assets in order to retrieve their money. In addition companies lacking valuable assets may struggle to secure loans due to their inability to offer sufficient collateral. Interest payments may be substantial, depending on a borrower's credit rating and the state of the economy. Certain loans (notably overdrafts) are repayable on demand, which could cause cash flow issues if repayment is demands earlier than expected

Important sectors

Commodities: a basic good used for the production of other goods or services o E.g. OIL; grains; gold § UK context: the UK IMPORTS most commodities (aside from natural gas, though the North Sea reserves are declining). Thus, a FALL in sterling's value comparative to other currencies makes commodities more expensive. In turn, this hinders business production (and increases the cost of living) - Financial and auxiliary services o The backbone of London, the UK's, and the global economy o Spurred by Thatcher and Reagan

stages of an acquisition:

Contracts: lawyers must check whether key stakeholders such as employees, suppliers, distributors and customers have change of control clauses in their contracts. If such stakeholders are able to terminate their contracts with the company following an acquisition this may reduce the buyer's ability to operate effectively post-acquisition. Prospective buyers could consider whether viable alternatives exist that may reduce the bargaining power of existing stakeholders, or whether negotiations with these stakeholders should take place before a purchaser commits to an acquisition. Those stakeholders might, for instance, be willing to waive the relevant change of control clauses in advance of the deal completing. Lawyers may consider devising ways in which to incentivise those involved with the company to remain so, for instance through offering existing actors in the supply-chain long term contracts, or providing employees with share-options, pay rises or guarantees relating to the security of their employment. (Done by Employment lawyers) - Non-Solicit Clause: contractual promise from a seller to a buyer not to approach and attempt to poach, for instance, certain employees, suppliers, distributors or customers of the newly purchased company for a given time period in a particular jurisdiction. - Liabilities: the new purchasers assume responsibility for any existing liabilities of the acquired company. Due diligence aims to identify any outstanding liabilities as these could impact the financial viability of the proposed transaction.

what happens in the corporate practice area:

Corporate: focus on deal execution for clients. Can include share sales, mergers, acquisitions and joint ventures. As part of this process, corporate lawyers typically liaise with and co-ordinate other internal departments (e.g. Tax, competition and employment departments) to source specialist expertise and advice to facilitate transactions when the need arises. - Private M&A: concerns companies with a narrower shareholder base than public companies. A majority of the shares in 'private' companies are typically owned by founders (and sometimes also their friends and family members) and investors (e.g. angel investors and venture capital firms), with employees or other third parties owning minority stakes. - Public M&A involves targets that are listed on stock exchanges, and these companies typically have tens or hundreds of thousands of shareholders spread all over the world. Process for a private M&A is typically less regulated than for a public M&A transaction. As regulation of public M&A transactions has a greater focus on shareholder protection. Private M&Adeals also involve fewer if any required regulatory disclosures. Results in Private M&A having a shorter transaction timetable than public M&A deals.

Who are stakeholders?

Customers, Employees, Stockholders, Suppliers, Dealers, Community Members, Media, Elected Officials, Bankers, Environmentalists Sellers: typically parent companies, founder shareholders, individual investors (e.g. business angels), financial sponsors i.e. investment firms such as private equity firms, venture capital firms and institutional investors or management teams. - Business angels: wealthy individuals who invest their personal income in early-stage businesses in exchange for equity. Working with a business angel cam be especially beneficial for a business if that business angel has ample knowledge of and experience working in that business' industry. - Venture capital firms: like private equity firms, venture capital firms aggregate funds from institutional investors and private individuals, then aim to buy or invest in businesses and subsequently sell at a profit. Venture capital firms tend to focus on start-ups and scale-ups and deal only with equity, whereas private equity firms also invest in more mature businesses and often invest using a combination of cash and debt. - Institutional investors: institutions with specialist knowledge that buy, sell and manage investment securities in large quantities on behalf of others. Examples include pension funds, insurance companies and hedge funds. - Buyers: typically companies, investors (investment firms and high-net worth individuals) or management teams. - Lenders: the vast majority of deals are financed, at least in part, by debt. When looking to raise debt to finance a deal, there may be a range of options available for borrowers, depending on their credit rating, track record, commercial intentions, ability to offer security, existing relationships with lenders and more. - Investment banks: typically advise and assist cooperations and public bodies looking to raise money. In a deal scenario, they may help to arrange loans for buyers, or agree in advance to do so if their client is a prospective buyer and is later chosen as the preferred bidder. More generally the role of investment banks includes: connecting clients to potential investors; promoting and facilitating the issue of shares or bonds, for instance through helping to market and price the issues; and analysing the financial state of companies to help inform their valuations and identify any financial risks. They also trade securities such as bonds, shares and derivatives on behalf of clients. - Lawyers: on a deal, lawyers typically carry out legal due diligence, draft and negotiate the key documents and project manage the signing, completion and post-completion processes. - Accountants: assist with financial and tax-related due diligence, to verify a target's financial accounts, to calculate the figures that need to go into transactional documents, and to help with business valuation/price determination mechanisms - Regulators: usually have to obtain clearance from competition authorities before a deal can complete; clearance may be refused or granted subject to certain conditions, depending on whether the proposed transaction could result in a 'substantial lessening of competition' in the relevant market. May also need to apply for clearances and approvals from HMRC, whilst particular types of deals (e.g. certain deals in the healthcare and finance sectors) may require additional approvals from specialist bodies. - Consultants, experts and specialists: consultants, specialists and experts might also need to be brought in to advice on specific aspects of a deal. This could include environmental experts brought in to check whether a target's factories have been generating illegal levels of pollution, consultants tasked with assessing the potential social impact of a deal, and public relations consultants to advise on how best to promote the proposed deal to regulators and the public.

Liabilities that lawyers look for during due diligence

Debt: including loans, unpaid overdrafts, payments owed to suppliers, distributors or customers and bonds that have been issued and have not yet matured (meaning that the company must continue to make coupon payments to bondholders and will eventually have to repay the original price of the bonds i.e. the 'principal' amount). Buyer can require a warranty that no undisclosed debts exist. - Outstanding litigation: if pending litigation is settled post-acquisition, the purchaser will be liable to pay any damages awarded. It is thus essential for the purchaser to secure an indemnity from the seller against any such costs that may later arise and/or an undertaking that any on-going litigation will be settled before the acquisition is completed. This could also cover any litigation that is not pending, but arises as a result of the target's activities pre-acquisition - Pension scheme liability: purchasers will be liable for future pension payments that a company is obligated to make, including financial entitlements that have accrued as a result of work carried out pre-acquisition. Lawyers must thus check whether a target has enough capital set aside to fulfil these liabilities and could request a warranty regarding the state of a company's pension scheme.

Knock on effect of macroeconomic change

GDP is lower than expected: suggests the economy is weaker than predicted. Investors may therefore anticipate interest rate cuts to boost the economy. - Unemployment is much higher than expected: suggests overall demand for products and services (consumer spending) has fallen and as a result, less people are being employed to produce products and services. Investors may therefore anticipate interest rate cuts in order to stimulate spending and thus increase employment. - Inflation is much higher than expected: this means prices may have increased by a greater amount than expected. This could be undesirable if it diminishes the value of the domestic currency by too great an extent. Investors may therefore anticipate an increase in interest rates in order to decrease spending (demand) and consequently stabilise inflation (or even trigger deflation) - An earthquake strikes a region: businesses and consumers will have to spend their income on repairing or replacing assets, or may simply choose to spend less due to the uncertainty underpinning the region. in addition, transport links and other infrastructure may well have been disrupted, which could hinder commercial activity. Investors may therefore feel less certain about the future of the region and may also expect the region's central bank to cut interest rates in order to encourage spending and investment. Consequently investors may sell their investments in the region in order to reinvest in less risky markets and markets offering higher interest rates. All these factors could cause the region's home currency to depreciate. This is because once investors have sold their domestic investments, they will need to sell the currency that they received for the sale of these investments in order to buy the foreign currency required to make investments in other countries. This would increase the supply and thus decrease the price of the domestic country. - A hurricane hits a major oil producing region: investor concern could arise as to whether any damage caused by the hurricane would disrupt oil production and thus case a shortfall in the supply of oil. Such a shortfall would likely result in oil prices increasing, which could reduce profits for companies dependent on oil - Election results are released: investors may believe that a 'market friendly' candidate (i.e. a candidate likely to encourage investment and economic growth), post-election, will take action to stimulate investment in the region, therefore increasing the value of local market investments. If a market friendly candidate is expected to win an election, it is likely that the country's currency will 'rally' (i.e. increase in value). This is because overall demand for that currency would likely increase, as investors looking to make additional investments in to the country would require the country's currency to do so. - A corporate scandal/disaster occurs: the share price of businesses involved/affected will likely plummet as investors sell their shares and supply starts to outweigh demand. Investors would likely react this way if they felt uncertain about, for example, the potential negative effects the scandal or disaster could hand on a businesses brand, it costs and operational capacity , its supplier and other stakeholder relationships, and consumer sentiment more broadly.

How to analyse basic financial accounts

If profits have increased year on year, this could indicate that the company could continue to thrive. Conversely, if the net profit has decreased, this could on the face of it, suggest it may eventually run into financial difficulties. From this should try to discover by looking at the accounts why the net profit has decreased. - A decrease in revenue (which could cause a corresponding decrease in net profit) could suggest consumers are purchasing less of the company's products, which in turn may indicate that new competitors have entered the market (or that existing competitors have developed a similar product, perhaps at a more favourable price) - If the revenue has remained the same or increased but the net profit has decreased, look at whether the costs have increased (which would also decrease the net profit). If costs have increased, does this suggest the company has failed to implement effective mechanisms to control costs (in which case think of potential solutions, for instance laying off staff or looking for cheaper suppliers) or has the cost of raw materials increased (e.g. if the company produces apple juice, has the price of apples increased) alternatively has the company made an investment (e.g. purchased a factory) that has increased costs in the current year (and thus reduced the net profit) but may well contribute to an increase in net profit in future years.

Return on capital employed (ROCE):

Investors may take into account any financial returns previously received by investors (for example the size of dividends paid out or the growth rate of share prices) in addition to future projections of investor returns.

Issues that arise when businesses combine/cooperate:

Loss of control/conflict: reaching an efficient consensus on decisions may be difficult if the motives or objectives of the parties involved do not align. - Administration/costs: coordinating and integrating different businesses can be complex and costly. - Inefficiency: communication issues may arise if an organisation becomes more complex. In addition multiple alliances with similar partners may yield fewer benefits than partnerships with differentiated partners - Expropriation: a larger, more powerful company may steal customers, expertise, assets or processes and then terminate the agreement. Ensuring intellectual property rights are sufficiently protected can mitigate this risk.

Liabilities that lawyers look for during due diligence

Non-compete agreement: contains restrictions on the extent to which an individual or organisation can engage in work that 'competes' with the activities of another contractual party during the course of the agreement and/or after the agreement terminates or expires. In a transactional context, non-compete agreements may contain various contractual promises from the seller to ensure that if the sale goes ahead, the seller cannot subsequently set up a similar business and emerge as a competitor of the business they are selling. Agreements not usually perpetual and limited in time and scope. - Entire agreement clause: clause stating that only the terms contained within the contract will apply to the agreement, meaning that the parties will not be bound by any previous negotiations that have not been recorded in the contract. - Conditions precedent: conditions that must be fulfilled before full performance under a contract becomes due. Notable examples of conditions precedent include the verification (through due diligence) of all key promises made by the seller prior to the transaction and the receipt of clearance from the relevant competition authorities. - Warranties (statements of existing fact), undertakings (promises to take certain action in the future) and indemnities (promises the reimburse the other party if certain costs arise) can be included in the contract to allocate/mitigate risk.

What does PESTLE stand for?

Political(influence/impact government policies have on overall economy, tax, fiscal and trade policies), Economic(are consumers spending money or saving, how do inflation rates, tax rates, interest rates and exchange rates impact upon industry profitability, fdi), Social(cultural aspects, consumer attitudes, affect consumer demands, ethical issues), Technological(technological innovation, automated manufacturing, info , trading) Legal(how legislation has changed impact of international legislation and how does this effect businesses), Environmental(waste disposal, climate change, legislation concerning profit, wind farms, food producers)

Elements that can affect supply and demand:

Price and output: analysis of supply and demand trends can inform business decisions relating to the price at which product should be sold to customers and the quantity of goods that should be produced by firms (firm output) at each potential selling price. - Competing goods: price can be impacted upon by the price of identical or similar goods. - Substitute and complementary goods: demand may also be affected by the price and availability of substitute goods or complementary goods. For instance, a fall in the price of a substitute good may increase the demand for that product and consequently reduce the demand for goods to which the substitute product serves a similar purpose. In contrast a fall in the price of a complementary good may increase demand for products to which it is a complement, as the cost of the overall package will reduce. - Input costs and profit margins: the quantity goods supplied may also depend on the input costs involved in producing the goods. If costs are low and the potential profits are high for a product, supply will likely increase as it is more beneficial for firms to produce and sell this product (existing firms may increase output and other firms may enter the market). If supply increases firms may end up having to consequently compete on price to generate additional sales, resulting in the price increasing for consumers.

stages of an acquisition:

Process: pitch - internal/external checks - initial instructions - resourcing - auction process or bilateral scale - buyer protection - deal execution - Exclusivity agreement / lockout clause: buyers may request exclusivity over a proposed transaction for a period of time so that they do not waste time and money undertaking due diligence and negotiating only to lose out to another party. - Stage 1 pitch: law firms must pitch to clients in order to be selected as their legal advisor for a transaction. Pitches usually focus on the firm's capabilities and experience. - Stage 2, internal/external checks: law firms must check they are not engaging in work or projects or for any clients that may give rise to a conflict of interest. They must also carry out 'know your customer' checks on prospective clients to ensure those prospective clients don't pose a risk in terms of illegal activities. - Stage 3, initial instructions: the firm must ascertain the client's primary objectives and agree with the client a fee structure and approximate timetable for the execution of the proposed transaction. - Stage 4, resourcing: managing transactions can involve coordinating different practice areas internally to source the required specialist advice, whilst also engaging and coordinating external parties. Lawyers must therefore determine which offices, teams, team members and external parties will be required to execute the transaction. - Stage 5, auction process or bilateral scale: may be sold through auction, bilateral scale or an initial public offering. If the firm is advising a prospective buyer as part of an 'auction' process, the first step will usually be to help the client submit their bid. - Stage 6, buyer protection: to determine what price to offer and which terms to request, the prospective buyer will usually want to carry out due diligence to gain a better insight into the company's value and ascertain whether it will need particular contractual protections in place if the deal goes through. As the deal progresses, the buyer may also want the seller to sign an exclusivity agreement. - Stage 7, deal execution: if the client has been selected as the 'preferred bidder', the firm will then need to help structure the transaction, negotiate the main deal terms, draw up the key transaction documents and ensure that any required financing is in place before the deal is scheduled to complete.

How to purchase a business (structuring a transaction)

Share sale: involves a purchaser buying either all of another company's shares, or a controlling stake in another company. Following a share sale the target company retains all its assets and liabilities; the purchaser simply acquires all (or a portion of) the target company itself. The purchaser will however indirectly own/take on the target's assets/liabilities by virtue of its ownership of the targets shares. - Advantages of a share sale: easier for purchasers to gain full control over a company, including its human capital, tangible assets and intangible assets. Logistically, buying a business rather than specific assets from that business, is more likely to result in business continuity post-acquisition. Similarly, purchasers are exempt from goods and services tax if acquiring assets through a share sale. - Disadvantages of a share sale: may be difficult for buyers to persuade a sufficient proportion of shareholders to agree to a sale. Purchasers will also take on the target's existing liabilities and obligations. - Asset sale: involves a purchaser buying specific assets owned by another company such as intellectual property, real estate or stock - Advantages of a share sale: can cherry pick the assets that will form part of the transaction, giving it the flexibility to acquire and pay for only the assets it wants or needs. Valuation may be less subject as intangible assets such as customer loyalty need not be considered. It may be quicker and easier to carry out due diligence relating to specific assets as opposed to an in-depth investigation into an entire company. There is a lower risk of the purchaser taking on unforeseen liabilities, as it will only acquire liabilities inherently linked to the assets its acquiring. Tax law in the UK enables the market value of assets purchased to be offset against tax, even if the purchaser paid less than the market value. Buyer may however incur stamp duty land tax on real estate acquisitions. - Disadvantages of a share sale: purchasers will not gain full control over the entire company and may therefore fail to benefit from any employees or internal knowledge and processes that may have helped to facilitate the efficient and effective utilisation of the assets.

The Balance Sheet

Statement of Financial Position) which provides a snapshot of a company's financial position at a particular date (usually at the end of the year) Balance sheet is essential when analysing a company's finances, as it contains information on the company's capital structure.

What does SWOT analysis stand for?

Strength, Weakness, Opportunities, Threats

Exchange rates

The exchange rate: the rate at which one currency can be exchanged for another - SPICED: Strong Pound, Imports Cheap; Exports Dear - WPIDEC: Weak Pound, Imports Dear; Exports Cheap - Most highly developed countries run a trade balance deficit o I.e. they import more than they export § Meaning a weaker currency is undesirable - Most highly developed countries' economies are driven by consumption o Four factors contribute to a country's GDP: Consumption, Investment, Government Spending, Net Exports (exports - imports) § Consumption is roughly 3/5 of the UK's GDP · Thus, if the Pound is weak, imports fall (as they are more expensive in pounds), and consumption falls, thus UK GDP is weakened § If the Pound is weak, net exports will improve (though they are not that important for the UK's overall GDP)

Liabilities that lawyers look for during due diligence

Warranties: statements of existing fact contained in a contract. These amount to assurances or promises relating to the present condition of an object, entity or state of affairs, the breach of which may give rise to a legal claim for damages. By way of example, a seller may warrant to a buyer that it is not currently involved in any litigation. - Undertakings: statements, promising to take/refrain from taking certain action in the future. The statements must be given in the course of business/legal practice by someone held out as representing the firm (i.e. including secretaries and trainees), to a party that reasonably places reliance on them. For instance a seller may undertake (to a buyer) that it will settle any pending litigation before completion of an acquisition and to reduce the purchase price by any amount it pays out as part of that settlement agreement. - Indemnities: promises to pay the other party pound for pound compensation if specified scenarios take place. For instance, if the target company is in the middle of a law suit at the time it is acquired, the seller can agree to reimburse the buyers in the future for any money that the target company is required to pay out in relation to the law suit post-acquisition. Indemnities may be subject to financial caps i.e. limits on the amount that the seller will have to pay out if the buyer makes a claim that relates to the circumsta imitations, meaning that after a pre-agreed period of time post-acquisition, the buyer can no longer rely upon those indemnities.

Debt + equity:

add together the value of a business' equity then subtract the value of its liabilities

Fiscal policy:

adjusting government spending and tax o Less common (pre-Pandemic): increasing the budget deficit is expensive (as loans with interest need to be taken out); increasing taxes is politically unpopular o E.g. US stimulus cheques; increase to National Insurance to fund the Pandemic deficit; large infrastructure projects (Hoover Dam; HS2 etc.)

Monetary policy:

adjusting the money supply o Typically controlled by a central bank, not the central Government, due to a conflict of interest (the short/medium-term nature of politics encourages politicians to risk inflation for short-term economic growth, which would be politically popular). E.g. the Bank of England; the US Federal Reserve § The Bank of England's Monetary Policy Committee sets the base rate for sterling § The independence of central banks is tightly monitored by governments

IPO advantages and disadvantages

advantages: no interest payments are required, thus preserving cash flow. In addition, if the company goes bankrupt, the loss is spread across all shareholders. No security is required, meaning a company will not risk having its assets seized as a result of issuing shares and subsequently failing to generate sufficient profit. Some investors (e.g. business angels and private equity firms) may contribute skills, experience, expertise and contacts that benefit the company. Listing on a stock exchange can enhance a company's profile, this can increase its access to the market for capital and enable it to negotiate more preferential terms with suppliers and creditors. disadvantages: equity represents a stake of ownership and thus control among existing owners is diluted as additional shareholders join. Shareholders are afforded certain rights including the right to vote and significant company decisions may be subject to shareholder approval. A company may also become vulnerable to a hostile takeover as it can do little to prevent existing shareholders from selling their shares to investors that are attempting to acquire a controlling stake. As with bonds, if insufficient demand exists, a company may fail to raise all the capital it requires. Profits must usually be shared between more people, although paying dividends is typically discretionary. Share sales can be time consuming, complicated and costly to administer and once a company is publicly listed, it is subject to continuing disclosure requirements.

Practice area- Real estate/commercial property:

advise on the construction, acquisition, sale, transfer and financing of tangible assets such as buildings and land. In addition to drawing up the relevant contracts, real estate lawyers may also work on - planning permission applications; large regeneration projects; leasing and licensing arrangements and property related disputes. On corporate led transactions, real estate teams are likely to provide due diligence support on elements of transactions that involve property. As part of the due diligence process, real estate lawyers may have to ascertain which assets are actually included in the deal; who owns the assets and whether the seller has the legal right to sell the assets; whether any assets are subject to a lease that is approaching expiry; whether the assets are subject to any security (e.g. mortgages) or interests and whether there are regulations placed on the assets being sold

Discounted cash flow (DCF)

analysis can be used to value a company or project. Complex calculations are used to estimate the returns (cash) that would be received over time as a result of purchasing the target business. The figure is 'discounted' or 'adjusted' to take into account the changing value of money over time. The sum of all future cash flows (in and ot) is known as the net present value (NPV). This can help to project the potential value a proposed investment could generate.

Practice Area- Intellectual Property

at times requires a deeply technical understanding of the inventions and processes from which certain intellectual property rights are derived, which can make it an attractive prospect for lawyers coming from technical backgrounds (e.g. Science, Maths, Engineering and Medicine). In a deal context, intellectual property lawyers may be brought in to review clauses in the target company's contracts relating to the protection, use, transfer or licensing of intellectual property. This, at least in part will be to ensure that the target has not accidentally or deliberately transferred its intellectual property to third parties, or granted perpetual, irrevocable licences to use it. may also check that the company owns or the right to use the intellectual property in which it relies as without this may not be able to continue operating successfully. Without them, may not be able to use certain branding, specific technology in its products etc. Similarly, if the seller retains key intellectual property rights, it could potentially start up a similar business after the sale and compete with the buyer.

Bonds advantages:

bond issuers do not have to offer bond purchasers security over their assets (meaning issuers remain free to use their assets as they see fit) and bondholders rarely try to restrict a bond issuer's business operations. Access to multiple investors through the capital markets makes it easier to raise large amounts.

How can companies minimise tax liability

borrowing money from subsidiaries in more tax efficient jurisdictions and paying high interest rates in return; paying large franchise fees to franchisors based in more tax efficient jurisdictions; or paying inflate prices when acquiring goods from subsidiaries along the supply chain in more tax efficient jurisdictions.

chargee vs chargor

chargee- lender chargor- borrower

what do you think is required to become a commercial lawyer:

creativity- finding solutions to complete commercial objectives having foresight- the ability to anticipate problems and have an analytical approach to solving them enthusiasm and willingness to help- and similarly to learn training contract exists which the intention of teaching- but this is also supplemented with initiative and a willingness to learn time management: important to know which tasks need to be prioritised, gently pushing back deadlines, and saying no is a challenge- but you dont want to compromise your level of work if you deliver sub-standard work them this will harm your reliability- i would rather say no then compromise working under pressure- intellectual fulfilment- maintain the analytical element- ability to make connections,

EXPANSIONARY MONETARY POLICY:

decreasing the interest rate: decreases the cost of borrowing, and decreases the reward for saving à encourages consumer and business spending à trying to "heat" the economy (a slowing economy is a pre-cursor for a recession)

floating charge

different from fixed charges in the fact that the assets over which floating charges are taken can be freely sold unless the floating charge 'crystallises'. Circumstances in which the charge will 'crystallise' usually involves the borrower becoming insolvent. Ability to freely sell assets makes floating charges more suitable for assets over which it would be commercially impractical for a borrower to relinquish control to the lender. For example if a borrower relinquished control of its stock to the lender it would be unable to sell that stock without receiving permission from the lender each time a customer requested to buy that stock. More risk to lenders as floating charge holders will not be repaid in the event of insolvency until certain other parties have been repaid in full. - If lender A takes a 'fixed charge' over Borrowers Z's factory, the agreement will likely include terms that prohibit Borrower Z from: 1) disposing of that factory without Lender A's consent and 2) granting security over that factory to other lenders before Lender A has been fully repaid. Whereas if Borrower Z instead grants Lender A a 'floating charge' over its assets, Borrower Z will typically remain free to sell the secured assets unless and until certain pre-specified events occur.

Retention of Title Clause:

ensures that title to (i.e. ownership of) the goods remains vested in the seller until the buyer fulfils certain obligations (typically payment of the price). If the buyer is declared bankrupt before paying for the goods, the seller can subsequently retrieve the goods from the liquidator as the clause makes the transfer of ownership from buyer to seller condition on the buyer paying for the goods

Security:

essential form of protection for lenders. Refers to a right given by a borrower to a lender that typically entitles the lender to take control of some of the borrowers assets if the borrower fails to repay the loan as agreed. Under such circumstances, the lender can then try to sell enough of those assets to repay itself. A borrower will usually have to offer security to persuade a lender to lend, or to persuade a lender to charge a lower interest rate. When a lender takes control of a borrowers assets, this is know as the lender 'enforcing' its security i.e. invoking the pre-agreed right to sell the assets and retain some or all of the proceeds. Exists the risk that an asset over which security is taken will decrease in value, meaning a lender might not be able to fully recoup the money loaned even if it sells that asset. Lenders may therefore take security over assets that are collectively worth more than the loan. A lender can only invoke its right to sell the borrowers assets if pre-agreed circumstances arise, most notably if the borrower defaults on the terms of the loan (e.g. fails to make an interest payment to the lender on time)

Earnings before interest, tax, depreciation and amortisation multiple (EBITDA)

excluding interest, tax depreciation and amortisation from calculations makes it easier to compare two similar companies on a like-for-like basis, giving investors a better indiciation of which company is more inherently profitable. This is because interest and tax payments may depend on a company's capital structure or location, whilst depreciation and amortisation figures can be subjective and thus do not necessarily reflect a company's potential to generate profit in the future.

capital markets:

financial markets that link organisations seeking capital and investors looking to supply capital. Securities including shares and bonds are traded in the capital markets between governments and governments seeking capital, banks, private investors and other investors such as hedge funds and pension funds.

Bonds disadvantages:

if a company has a low credit rating or a low profile, it may struggle to sell enough bonds to raise all the capital it requires. To stimulate demand, companies may offer bonds with higher returns (known as 'high yield' or 'junk bonds'. Bond issues are expensive to arrange, as many terms need to be set out, a bond issue is therefore unsuitable for companies using only a small amount of capital.

contractionary monetary policy

increasing the interest rate: increases the cost of borrowing, and increases the reward for saving à discourages consumer and business spending à trying to "cool" the economy (if an economy is too hot, there is inflation)

Intangible resources:

investors could consider whether the target business has formed political, social or commercial relationships that could be beneficial. Take into account the value of human capital.

Comparable analysis/precedent transactions:

investors would likely also take into account the prices that have been paid for similar businesses under similar circumstances.

Prospectus:

legally required document that must precede bond or share issues. It advertises the issue to potential investors and contains information about the issuer's business, the potential risk and the issuing firm's financial circumstances in addition to the terms and conditions of the issue.

The Income Statement

measures a company's revenue, expenses (including interest and taxes) and after-tax profits over a year Costs of Goods sold: includes the direct costs associated with each sale made (usually variable costs). For example, if a firm sells 1,000 desks, such costs would include the direct costs associated with manufacturing each desk. - Selling, general and administrative costs: includes general expenses that do not directly relate to each individual sale (usually fixed costs). Examples include overheads such as office rental payments and utility bills and purchases of assets. - Net profit: refers to the amount of money remaining from the revenue after all related expenses have been subtracted.

Quantitative easing:

monetary policy used to stimulate economies. Involves central banks introducing new money into the economy and purchasing financial assets in the market. Flooding the market with additional capital in such a way leaves investors with additional funds, encouraging them to increase their engagement in investment activities.

Practice Area- Competition

more commercially focused than other seats as you need to know clients products and services in detail, including how these products and services fit into the wider market. Can also involve more academic work than your typical transactional seat, as a result of the legal analysis that Competition lawyers must apply to clients businesses and markets. Politicians often use merger control mechanisms to intervene in merger proposals that are politically sensitive or unpopular with the public. Competition lawyers may advise on whether a deal could be deemed anti-competitive and thus blocked by a regulator, which would involve analysing whether that deal might result in a 'substantial lessening of competition' in the relevant jurisdiction. In a transaction deal may collapse where a competition team's analysis clearly indicates that a deal will be blocked by competition authorities.

Key elements of a contract:

offer, acceptance, consideration and intention. Intention is that idea that where (a) a offer is made; (b) acceptance has occurred and (c) consideration exists, the parties intend to be legally bound.

Practice Area- Employment, benefit, pensions

on a transaction, these teams may review the employment contracts of key executives to ascertain whether those executives can terminate their contracts if the transaction goes ahead; assess whether there are any employment related claims or issues that could result in costly disputes; and review a target company's pensions arrangements (for instance, to check whether there is a large pension scheme deficit). Responsible for drafting employment contracts and settlement agreements; assisting with employee renumeration and incentivisation strategies; advising on the recruitment and retention of employees; guiding clients through the processes that must be followed when disciplining or dismissing employees. In a contentious contest, may advise on disputes relating to issues such as discrimination, unfair dismissal, whistleblowing or the soliciting of employees. May also advise on restructurings and insolvencies especially where these course of action involve dismissing employees and creating redundancy packages.

force majeure

predetermine the allocation of risk and free each party from liability if specified circumstances arise that are beyond the control of the parties and prevent either party from fulfilling their obligations.

Indemnities

promises to reimburse the other party if certain costs arise

Statement of Financial Position (SOFP)

provides a snapshot of a company's financial situation. It lists the value of everything a business owners (its assets) and everything that the business owes (its liabilities). All financial events in the life of a company must be accounted for through the recording of two corresponding entries in the balance sheet. Company assets (which form one side of the balance sheet) must have been supported through the use of some sort of financing (detailed on the other side of the Balance Sheet), either in the form of capital (equity) or through the company taking on debt (liabilities) - For example, if a company raises £1 million through selling shares and takes out a loan of £1 million when it first incorporates (starts up and registers as a company), its total assets will amount to £2 million. This £2 million will be recorded as a) £2 million cash in the current assets section of the Balance sheet and b) £1 million in the 'Equity' (share capital) section and £1 million in the 'Liabilities' section on the other side of the balance sheet. If the company subsequently purchases a building for £500,000, then cash will reduce to £1.5 million and a new category will be created, typically called plant, property and equipment, the value of which will be £500,000. In the meantime, the Equity and Liabilities side of the balance sheet will remain unchanged as no new share capital has been received and no new debt has been taken o

Synergies

refer to the benefits that can result from the interaction between two companies. Examples of synergies include: the sharing of resources to reduce costs and the sharing of knowledge/human resources to improve product offerings. Can ensure that the value generated by companies that have been combined exceeds the overall value that those companies could produce separately.

Amortisatio

refers to the decrease in value of intangible assets over time. For example, a patent may decrease in value as its expiry date approaches.

what happens in the Banking/Finance practice area:

seat will offer an insight into the ways in which companies obtain capital from a variety of external sources. Processes involved in lending/borrowing and how banks and lenders operate from a legal perspective.

Macroeconomics

studies the changes and trends in the economy as a whole at regional, national and international levels. It examines economy-wide phenomena such as changes in unemployment, interest rates, Gross Domestic Product, economic growth and inflation. A macroeconomic change in one area will typically have knock-on effects in other areas.

Microeconomics

studies the interaction between buyers (consumers) and sellers (firms) and the factors that influence their decisions. It can provide an insight into the ways in which setting different prices for products will affect the quantity of products demands by consumers, which in turn can help sellers to determine the optimal price they should charge for products and the quantity of products that they should produce at that price to achieve maximum profitability. For a company to generate optimal profit levels, a balancing act must be struck between generating as much profit as possible per individual sale and generating as many sales as possible. in contrast, if supply increases to a greater extent than demand, firms may have to reduce prices to increase demand.

Practice area: Tax

tend to carry out a mixture of advisory and contentious work, including transaction structuring, litigation and investigations by tax authorities. Tends to be more 'law heavy' as it involves regularly researching into and negotiating complex tax legislation. Appeal if you enjoy technical legal research and intellectually challenging 'black letter law'. Almost every transaction will have tax implications, so tax lawyers are regularly brought into advice on the tax aspects of deals. These aspects might include the tax-related risks and challenges, the corporate structures that the parties intend to use to execute the deal, tax warranties and indemnities that the parties wish to include in the transactional documents and the broader tax reliefs and efficiencies that might be available. May also help determine the way in which a sale/acquisition should be structured (for instance, whether from a tax perspective the parties should pursue a share sale or an asset sale), the methods of financing that would be most tax-efficient (e.g. using cash reserves, debt, equity or a combination), and the way in which consideration should transfer from the buyer to the seller.

economies of scale

the cost advantage gained as output increases. This cost advantage arises when fixed costs are spread across a greater quantity of sales. When organisations place larger orders with suppliers, suppliers will usually pass on a proportion of the cost savings they receive through economies of scale to that firm, in turn reducing the firm's input costs

Bank base interest rate

the interest rate at which national central banks lend money to domestic banks

Aggregate demand/supply:

the overall amount of goods and services demanded/produced within a particular economy in a given period.

Product life cycle:

the period over which a product enters and eventually exits the market. The number of sales typically increases after a product is released and initially marketed. The number of sales then tends to stabilise and eventually diminish as more competitors enter the market and the product is replaced by cheaper and superior alternatives.

Inflation:

the rate at which the prices of goods and services rise. When an economy experiences inflation, each unit of currency buys fewer goods and services. Inflation is the primary reason products cost more today than decades ago.

alliance (partnership)

when businesses or individuals with complementary capabilities/resources cooperate in order to advance their mutual interests. For example the inventor of a product may engage in a partnership with a lawyer, distributor or marketing agency. The parties usually share the costs, risks and rewards.

Franchising

when firms sell the right for others to set up identical firms under the same name (sing the same brand and selling the same products) in exchange for a lump sum payment and/or royalties. This can enable rapid expansion that boosts a franchisors brand exposure and customer base. A franchisor can usually exert some control over a franchisee to ensure that the franchisee does not act in a manner that damages the brand. E.g. starbucks and burger king.

Merger:

when multiple businesses voluntarily and permanently combine to form one business

aquisition

when one business purchases another, either through mutual consent or through a hostile takeover.

Licensing

when one firms permits another firm to use an element of its business, for instance the right to manufacture its products, incorporate its technology into a product or use its IP rights, usually in exchange for a royalty. If a firm lacks the capabilities to commercialise a product but has developed the technology, licensing to a firm that can commercialise it could provide a source of revenue. However, if the technology is embedded into a product, the licensor may generate little brand recognition or customer loyalty. There is also a risk that the licensee will expropriate the technology and emerge as a competitor.

Recession:

when there is negative economic growth for two consecutive quarters (six months) - The long-run trend: real GDP is growing - The ambition of the central banks and governments its to dampen the volatility of the economic cycle expansion- peak-recession, depression, trough, recovery, expansion

joint venture

when two or more businesses pool their resources and work together on a specific task or project, such as the development or launch of a product.

Asset finance

where a borrower borrows money for the purpose of acquiring specific assets, such as equipment, machinery and vehicles. Usually the assets purchased will be used as security for the loan

Bond issue

where a company (the 'issuer) issues (I.e. sells) debt instruments called bonds to investors through the debt capital markets, in exchange for cash. Bonds entitle investors to regular interest payments over a given period, at the end of which the bonds 'mature' and each investor becomes entitled to receive back their initial investment (known as the principal amount) in full. In this sense the bonds act like IOUs

Initial public offering

where a company lists its shares on a stock exchange for the first time in order to sell those shares through the equity capital markets. Listing through a stock exchange also facilitates the subsequent trading of those shares.

Share issue:

where a company sells (issues) its shares. Investors provide money in exchange for shares that represent an ownership stake in a company, with the aim of reaping returns in the form of capital growth (if these shares are later sold at a profit) and dividends (if the company elects to pay dividends)

Project finance/infrastructure finance

where borrowers (e.g. companies or governments) secure long-term funding for a large long-term project or infrastructure development. The funding for these types of projects is usually structured so that the borrowed funds are released in traches, the release of each being contingent on the borrower hitting certain milestones

Real estate finance:

where borrowers borrow money for the purpose of acquiring property - Capital markets: where companies raise money through the capital markets, for instance through raising debt (e.g. by issuing bonds) through the debt capital markets, or selling equity (i.e. shares) through the equity capital markets.

General corporate lending:

where companies borrow money from lenders, for example to fund their day-to-day operational activities.

Acquisition finance

where companies or investors e.g. private equity firms, borrow money for the specific purpose of financing an acquisition of another company. This type of work might also be carried out by a 'leveraged finance' team, alongside other types of lending.

Restructuring and insolvency

where the team assists businesses that are experiencing financial difficulties or been declared bankrupt, for instance organising the restructuring of its financial arrangements or helping to administer its assets during a bankruptcy process. - In the context of a deal, finance teams may advice on the proposed financing of the deal and draft the key finance documents. They may also carry out finance related due diligence to: clarify the terms of the parties prior/existing financing arrangements and assess how these terms could affect any new financing; ascertain whether security exists over the target's assets (if so, this will likely need to be released before the target changes hands); determine whether security can be taken over the borrower's assets and/or the targets assets to support a loan and ensure any financial transactions comply with relevant regulations.