+353-1-416-8900REST OF WORLD
+44-20-3973-8888REST OF WORLD
1-917-300-0470EAST COAST U.S
1-800-526-8630U.S. (TOLL FREE)

Due Diligence in Securities Offerings

  • ID: 3461597
  • Book
  • Region: Global, United States
  • 374 Pages
  • ALM Media, LLC
1 of 4
During a period of strong debt capital markets and a hot IPO market, as well as an accompanying demand for capital markets services, the subject of due diligence in securities offerings remains topical.

This legal handbook is a practical guide for conducting due diligence in securities offerings. The book is written to assist three principal actors involved in the due diligence process:
  1.  The securities lawyer (typically an associate or partner in a law firm retained as counsel to the issuer or the underwriters),
  2.  The investment banker employed by an underwriter, and
  3.  In-house legal counsel of the issuer.
The book provides practice reminders, checklists (and warnings against checklists in some cases), sample diligence requests, sample diligence questions and other practical diligence materials.

It is written in a way that makes it a useful and accessible guide for the junior associate or junior banker working on a securities offering, and also gives enough detail to help keep a more experienced practitioner on track.
 Chapters Include:
  • The Role of Due Diligence
  • Overview of the Diligence Process:
  • Sources of Liability
  • Documentary Due Diligence
  • Management Due Diligence
  • Offering Document Review, Back-Up Book
  • Negative Assurance Letters
  • Auditor Due Diligence
  • The Comfort Letter
  • Debt Instrument Due Diligence
  • Specialist Due Diligence Topics
  • Using the Underwriting Agreement and
  • Legal Opinions as a Final Due Diligence Check
Note: Product cover images may vary from those shown
2 of 4
TABLE OF CONTENTS

CHAPTER 1
Introduction:
The Role of Due Diligence
§ 1.01    Introduction for Securities Lawyers
[1]    Protecting Issuers and Underwriters
[2]    Basis for Negative Assurance Letter and Opinions
[3]    Protecting the Firm
§ 1.02    Introduction for Investment Bankers
[1]    The Banker as Gatekeeper
[2]    Franchise and Reputational Risk
§ 1.03    Introduction for In-House Legal Counsel
[1]    Protecting the Company
[2]    Protecting the Board
[3]    The Benefit of Strong Disclosure Controls and Procedures
§ 1.04    Integrity and Courage

CHAPTER 2
Overview of the Diligence Process:
A Quick Reference Guide
§ 2.01    Documentary Due Diligence
[1]    Getting Started
[2]    Documentary Due Diligence Process
§ 2.02    Management Due Diligence
[1]    Management Due Diligence Sessions
[2]    Director and Officer Diligence
§ 2.03    Financial Due Diligence
[1]    Auditor Diligence
[2]    Comfort Letter Process
[3]    Financial Review by Underwriter
§ 2.04    Diligence Procedures Performed by Underwriters
§ 2.05    Review and Back-Up of Offering Document
§ 2.06    Documenting the Process

CHAPTER 3
Sources of Liability
§ 3.01    Sources of Liability
[1]    Section 11(a) of the Securities Act
[2]    Section 12(a)(2) of the Securities Act
[3]    Rule 10b-5 Under the Exchange Act
[4]    Section 20(a) Control Person Liability
§ 3.02    The Due Diligence Defense
[1]    Defenses Under Section 11
[a]    Non-Expertized Portions
[b]    Expertized Portions
[2]    Defenses Under Section 12
[3]    Defenses Under Rule 10b-5
[4]    Defenses to Control Person Liability
§ 3.03    Conducting a “Reasonable Investigation”: What the Courts Say
[1]    Rule 176 Under the Securities Act
[2]    Examples of Good and Bad Diligence
[a]    Outside Directors
[b]    Underwriters
[c]    Good Procedures

CHAPTER 4
Documentary Due Diligence
§ 4.01    Introduction to Documentary Due Diligence
[1]    Not a Check-the-Box Exercise
[2]    Getting Started: Review of Background Information
[3]    Summary of Documentary Due Diligence Process
[a]    Prepare a Documentary Due Diligence Request List
[b]    Schedule a Call with Issuer to Review Documentary Due Diligence Request List
[c]    Review Documents Provided
[d]    Continuous and Interactive Diligence Process
[e]    Final Follow Up Before Launch and Pricing
§ 4.02    The Documentary Review and Its Ultimate Goals
[1]    What to Look for Generally
[a]    What Is a Material Fact?
[b]    What Is a Red Flag?
[2]    Reasons for Reviewing the Items Requested
§ 4.03    Foreign Issuer Diligence/Local Counsel Diligence
§ 4.04    Addressing Confidentiality and Privilege Issues
Appendix A    Sample Documentary Due Diligence Request List

CHAPTER 5
Management Due Diligence
§ 5.01    Overview of Management Due Diligence
[1]    Management Diligence Sessions
[2]    When to Hold Sessions
[3]    Who Should Attend
[4]    Specialist Diligence Sessions
[5]    Coordination with Drafting of Offering Document
[6]    Bring-Down Diligence
§ 5.02    Integrity of Management
[1]    Background Checks
[a]    Who to Cover
[b]    Review and Follow Up
[2]    D&O Questionnaires
§ 5.03    Other Investment Banker Diligence Procedures
[1]    Financial Modeling
[2]    Customer/Supplier Interviews
[3]    Site Visits
[4]    Interacting with Research Analysts
Appendix A    Sample Management Diligence Topics
Appendix B    Sample Bring-Down Diligence Questions
Appendix C    Form D&O Questionnaire (IPO)
Appendix D    Form D&O Questionnaire (144A Short-Form Version)
Appendix E    Sample Customer Diligence Questions

CHAPTER 6
Offering Document Review, Back-Up Book
and Form Check
§ 6.01    Offering Document Review
[1]    Initial Public Offerings (IPOs)
[2]    Shelf Take-Downs and Review of Incorporated Documents
[3]    Identifying Forward-Looking Information
§ 6.02    The Back-Up Book
[1]    Scope of Coverage
[2]    Appropriate Support
[3]    Reviewing Roadshow Presentations
§ 6.03    The Form Check
[1]    Check-the-Box Exercise
[2]    Incorporated Documents
[3]    144A Offerings
Appendix A    Sample Cautionary Disclosure Regarding Forward-Looking Statements

CHAPTER 7
Negative Assurance Letters
§ 7.01    Introduction
[1]    Basis for Providing Negative Assurance Letters
[2]    When Negative Assurance Letters Are Provided (And When They Are Not Provided)
[3]    Negative Assurance Letters Provided by One Law Firm
[4]    Negative Assurance Letters Provided by In-House Counsel
§ 7.02    Anatomy of the Negative Assurance Letter
[1]    Addressees
[2]    Description of Process Undertaken
[3]    Statement Regarding Registration Statement
[4]    Statement Regarding Disclosure Package
[5]    Statement Regarding Prospectus or Offering Document
[6]    Exclusion of Financial Data
[7]    Exclusion of Statistical Data
[8]    Other Limitations
[9]    Reliance and Concluding Paragraph
[10]    Statement Regarding Compliance as to Form
§ 7.03    Documenting the Diligence Process
[1]    Diligence Memorandum
[2]    Memoranda to Files
[3]    Document Retention
[4]    Closing Set
Appendix A    Sample Form Negative Assurance Letter

CHAPTER 8
Auditor Due Diligence
§ 8.01    Preparing for Auditor Due Diligence Sessions
[1]    Preparing the Questions
[2]    Scheduling the Session
[3]    Parties in Attendance
[4]    Prior Review of Financial Disclosures
[5]    Review of Audit Committee Materials
[a]    Audit Committee Meeting Minutes
[b]    Management Letters or 404 Materials
[c]    Required Auditor Communications
§ 8.02    Dealing with Non-Cooperative Auditors
§ 8.03    Evaluating Adequacy of Existing Disclosures.
Appendix A    Sample Auditor Due Diligence Questions

CHAPTER 9
The Comfort Letter
§ 9.01    Reasons for the Comfort Letter
§ 9.02    Basic Elements of the Comfort Letter
[1]    Date, Delivery and Staleness
[2]    Addressees
[a]    Underwriters
[b]    Initial Purchasers and 144A Representation Letter
[c]    Board of Directors
[3]    Statement of Independence
[4]    Procedures Regarding Audited Financial Statements
[5]    Procedures Regarding Unaudited Financial Statements
[6]    Change Period Procedures
[7]    Pro Forma Financial Information
[8]    Tables, Statistics and Other Financial Information
[a]    Levels of Tick-Mark Comfort
[b]    Preparing a Circle Up
§ 9.03    Special Issues
[1]    Comfort on Acquired Company Financials
[2]    Comfort on Non-GAAP Financial Measures
[3]    Comfort on Flash Numbers and Issues with Fourth Quarter Results
[4]    Comfort in Offering by Non-U.S. Issuers
§ 9.04    Additional Procedures When Comfort Is Not Available
Appendix A    Sample Comfort Letter
Appendix B    Sample 144A Representation Letter
Appendix C    Sample CFO Comfort Certificate

CHAPTER 10
Debt Instrument Due Diligence
§ 10.01    Identifying Issues in Debt Instrument Due Diligence
[1]    Equity Offerings: What to Look For
[2]    Debt Offerings: What to Look For
[3]    Acquisition Financings: What to Look For
§ 10.02    Resolving Conflicts
[1]    Waiver
[a]    Change of Control
[b]    Restricted Payment
[2]    Consent Solicitation
[3]    Redeem or Repay Existing Debt
[4]    Equal and Ratable
Appendix A    Sample Debt Instrument Review Template

CHAPTER 11
Specialist Due Diligence Topics
§ 11.01    Litigation Diligence
§ 11.02    Regulatory Diligence
§ 11.03    Intellectual Property Diligence
§ 11.04    Employment, Compensation and Benefits Diligence
§ 11.05    Environmental Diligence
[1]    Environmental Compliance and Remediation Obligations
[2]    Material Legal Proceedings
[3]    Assessing Contingent Liabilities
[4]    Asset Retirement Obligations
§ 11.06    Tax Diligence
§ 11.07    Diligence Issues Related to OFAC and Other Sanctions, Trade Restrictions, and Anti-Bribery and Money Laundering
[1]    Sensitive Areas
[a]    OFAC and Other Sanctions
[b]    Trade Restrictions
[c]    Anti-Bribery and Money Laundering
[2]    Due Diligence Procedures
[3]    Specialist Counsel
Appendix A    Sample Intellectual Property and Technology Due Diligence Call Agenda
Appendix B    Sample Intellectual Property and Cybersecurity Due Diligence Request List
Appendix C    Sample Environmental Due Diligence Request List  
Appendix D    Sample FCPA and Anti-Bribery Compliance Due Diligence Questionnaire  
Appendix E    Sample OFAC and Trade Due Diligence Questions and Document Requests

CHAPTER 12
Using the Underwriting Agreement and
Legal Opinions as a Final Due Diligence Check
§ 12.01    The Underwriting Agreement as Diligence Tool
§ 12.02    A Final Check

INDEX
Note: Product cover images may vary from those shown
3 of 4

Loading
LOADING...

4 of 4
Corey R Chivers
Note: Product cover images may vary from those shown
5 of 4
Note: Product cover images may vary from those shown
Order Online - visit: https://www.researchandmarkets.com/reports/3461597
Adroll
adroll