Recent Articles

Conflicts of Interest in LBOs -- a Case Study

Geoffrey Parnass
February 22, 2011 16:04

  Vice Chancellor J. Travis Laster, a member of the Delaware Chancery Court, handed down a recent decision highlighting the substantial conflicts of interest that bedevil the investment banking industry in leveraged buyout transactions, and how one board of directors mishandled these...

Implied Covenants in Earn-Outs -- Lady Duff-Gordon Rides Again

June 24, 2010 15:09

Where earn-out compensation represents a significant portion of the seller’s consideration in a purchase transaction, the buyer is required to use reasonable efforts to achieve the purposes of the earn-out. That is the law in Massachusetts, as per a recent Federal appeals court...

Going Private: Rule 13e-3 and Private Equity Buyouts - Part 2

Geoffrey Parnass
October 28, 2009 00:22

In acquisitions of public companies, private equity sponsors often seek to retain members of the target’s management to run the day-to-day operations of the portfolio company after closing. Almost invariably, the sponsors will offer management shares in the surviving company in order to...

House Hearing on Private Equity and Venture Capital Regulation - Part 2: Leveraged Buyouts

Geoffrey Parnass
October 23, 2009 18:39

In debates over public policy, the first battle often involves a contest over narrative. If others adopt your story, you can gain an early advantage by having lawmakers solve the problems you define for them. In this month’s hearings on “Enhancing Oversight of Private Pools of...

House Hearing on Private Equity and Venture Capital Regulation- Part 1: The Private Equity Council

Geoffrey Parnass
October 21, 2009 22:10

Everybody likes a fight. So it came as no surprise that the media dredged up some hackneyed headlines to describe the House Financial Services Committee’s hearings on regulating hedge funds, venture capital, and private equity earlier this month. Whether they dodged bullets at a...

House Financial Services Committee Proposes Hedge Fund & Private Equity Regulation

Geoffrey Parnass
October 05, 2009 19:02

At the end of last week, the House Financial Services Committee focused on regulatory reform measures designed to mitigate systemic risk to the financial system and to regulate hedge funds and private equity. Federal Reserve Chairman Ben Bernanke offered his advice on what steps Congress...

Going Private: Rule 13e-3 and the Acquisition of Public Companies - Part 1

Geoffrey Parnass
September 30, 2009 14:52

When a private equity fund buys substantially all of a public company’s outstanding shares in a cash offering, the acquisition may be described colloquially as “taking the company private.” From the perspective of the Securities Exchange Commission, however, the term...

The Disney-Marvel Merger Negotiations: From the Opening Scene to the Closing Credits

Geoffrey Parnass
September 27, 2009 03:12

The DVD releases of future Disney films featuring Marvel superheroes undoubtedly will contain bonus items for the cinephile. If a single viewing of a movie doesn’t sate your appetite, you’ll probably be able to watch it again accompanied by the director’s audio...

LPs Push to Reinforce Fiduciary Duty of Sponsors

Geoffrey Parnass
September 18, 2009 19:15

  As we previously noted, the ILPA (International Limited Partners Association) recently published a wide-ranging set of “best practices” that it hopes will shape the practices of the private equity sponsor community. In this piece, we’d like to focus on ILPA’s...

Drafting Advancement and Indemnification Provisions in Limited Partnership Agreements

Geoffrey Parnass
September 17, 2009 04:13

A July ruling by the Court of Chancery holds important lessons for how Delaware courts interpret advancement and indemnification provisions in limited partnership agreements. In J. Michael Stepp v. Heartland Industrial Partners, L.P., two former officers and directors of the defunct Collins...