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It is hard to believe that private equity professionals and not just comparative law professors and lawyers are intensely focused on the differences between English law sale and purchase agreements and U.S. stock purchase agreements (both referred to in this article as a “SPA”).

Private equity investors that control the boards of their portfolio companies have long assumed that they will also be able to control any arms-length sale of the public portfolio company to a third party provided only that each stockholder of the company is treated the same way in such sale.

In one of a number of encouraging signs of life in the PE financing markets earlier in the spring, so called “covenant-lite” Credit Agreements, which had practically disappeared between 2008 and 2010, have become fashionable again.

Notwithstanding the economic turbulence in the Eurozone, the first quarter of 2012 saw a significant rise in high yield offerings in Europe (a reported increase of four times over the last quarter of 2011).

The Jumpstart Our Business Startups Act (the “JOBS Act”) has altered in certain fundamental ways the landscape of the federal securities laws. One such change permits portfolio companies of private equity sponsors that qualify as emerging growth companies (“EGCs”) and their authorized representatives to “test the waters” with investors both before and after the filing of a registration statement to determine investors’ level of interest in a securities offering contemplated by such portfolio company.

Investing in distressed assets across the Euro-zone is widely perceived as a key opportunity on the private equity landscape. Significant amounts of money have been raised for distressed investments, and the number of potential investors has grown substantially.

On June 8, 2012, the Securities and Exchange Commission (the “SEC”) delayed the compliance date for the provisions of Rule 206(4)-5 under the Investment Advisers Act of 1940 (the “Pay-to-Play Rule”) that apply to the use of placement agents and solicitors by registered and unregistered investment advisers (including private equity and hedge fund advisers).

As savvy PE professionals know, under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), a private equity fund’s assets could be exposed to joint and several liability for unfunded pension benefit liabilities of any portfolio company of the fund if the fund is engaged in a “trade or business” and is under “common control” with the portfolio company.

Many dealmakers, relying on the classic adage that “fraud vitiates everything,” assume that remedy waivers, including non-reliance and exclusive remedy provisions, do not apply to claims alleging fraud.

The Private Equity Report Editorial Board

This report is a
publication of
Debevoise & Plimpton LLP
www.debevoise.com

EDITORIAL BOARD
 

Paul S. Bird
Editor-in-Chief

Andrew M. Ahern
Jennifer L. Chu
Rafael Kariyev
Scott B. Selinger
Simon Witney

Alicia E. Lee
Associate Editor

FOUNDING EDITOR

Franci J. Blassberg

All contents @2018 Debevoise & Plimpton LLP. 
All rights reserved.




 

 

 

 

 

 

 

 


 

 


 


 

 

 

 

 

 

 

 

The Private Equity Report

Spring 2012
Vol. 12, Number 3
prior issues