In many business and real estate transaction, investors are eager to get their money back first – and with preferential returns. Equity investments in this sense take on a form of a security interest – the equity is structured in a way that it is paid back before other equity investors; or in the event the transaction or entity fails, these investors have a priority claim on liquidation proceeds. Beyond the priority claim to the return of their capital and perhaps a preferential rate of return, equity and debt investors sometimes also require certain information, management and/or control rights on the occurrence or non-occurrence of certain triggers. There are many ways to achieve these preferential returns form preferred stock or convertible debt to contractual rights, but they all come with drafting complexity and practical tradeoffs. This program will provide you with a practical guide to drafting equity and debt instruments to achieve preferential returns in business and real estate transactions.
· Drafting equity and debt instruments to achieve preferential returns in business and real estate transactions
· Non-stock contractual arrangements – cash and “payment in kind” distributions
· Drafting issues – lockboxes, benchmarks, “hurdles” and more
· Related information, management and control rights – and triggering events
· Drafting convertible debt instruments to achieve preferential returns
· Drafting Anti-dilution provisions in preferred returns
· Preferred returns in C and S corporations v. pass-through entities
Tyler J. Sewell is an attorney in the Denver office of Morrison & Foerster, LLP, where he specializes in mergers and acquisitions. He focuses his practice on advising financial and strategic buyers and sellers in public and private M&A transactions and complex corporate transactions. He negotiates and documents leveraged acquisitions, divestitures, asset acquisitions, stock acquisitions, mergers, auction transactions, and cross-border transactions. Mr. Sewell received his B.S., with merit, in ocean engineering from the United States Naval Academy and his J.D., magna cum laude, from the University of Pennsylvania Law School.
Non-Members Must Register via Form