A story on locked box mechanism
A battle of egos is how I remember the incident. I was once involved in an M&A transaction which the consideration was based on a locked box mechanism.* In addition to lawyers, there were also financial adviser and investment banker involved in the deal. All the advisers were in a …
M&A: Basis for purchase price
A buyer and a seller in an M&A transaction may value the business or target company based on an agreed basis such as by reference to a multiple of profits for an agreed period of time. The buyer may want to consider including a clause in the sale and purchase …
Beware of drafting error
A simple error in drafting could create a problem in the future. Consider the following scenario. A shareholders’ agreement sets out board composition and right of shareholders to nominate directors. A shareholder who holds majority of the shares in the company would usually have the right to nominate more directors …
Work life balance-sustainability is the key
I think I have not written any post on mental health or work life balance before. It is a difficult topic. We have different needs. What one person needs for mental health and work life balance is different for another person. With the demand that comes with the nature of …
Maintaining responsibility when delegating
I had my “this is a textbook answer” moment. I requested for research to be done. What happened next is common in law firms- my request was further delegated to another person. When I read the research finding that changed hands a couple of times, I noted that it was …
M&A: What should and shouldn’t survive termination?
Sale and purchase agreements for M&A transactions usually provide for certain clauses of the agreements to survive termination. In other words, if the agreements are terminated. some clauses continue to be effective. Termination of agreements only terminates the parties’ duties to carry out contractual obligations which have not been performed …
Two licences to look out for in legal due diligence
“We do not require any licence for our business.” Sometimes I get the above reply in response to questions about licences held by companies which I am conducting legal due diligence on. Usually these are companies carrying on business that are outside the sectors regulated by the Malaysian government. Nonetheless, …
Structuring payment of purchase price for M&A transactions
You need to consider the following when structuring payment of purchase price for M&A transactions: 1. Amount of purchase price/ the way in which it is to be determined 2. Time for payment of the purchase price 3. Manner in which the purchase price is to be satisfied Purchase price …
Use a checklist!
Being meticulous is an important skill for an equity capital markets (“ECM”) lawyer to have. ECM exercise is typically fast-paced and deadlines driven. It requires co-ordination among the due diligence working group members (“DDWG”) as draft documents may be prepared by a DDWG member and commented by the rest of …
Professional relationship doesn’t have to be transactional
During the early stage of the Covid pandemic, when Malaysia was under movement control order, I received a Whatsapp message from a number not saved on my phone. At that time, I had just lost most of my contact numbers after accidentally dropping my old phone and I had to …