LAW 624LEC - The Life Cycle of a Firm

This course is concerned with the formation, expansion, and financial management of firms. We explore various ways in which companies raise money and the various parties to financing transactions, which may include extension of credit by banks and other lenders in the form of term loans and revolving loans supported by guarantees, letters of credit and other credit support mechanisms, capital markets transactions including exempt and public offerings of debt and equity securities. We pay attention to priority structures and tiers of debt as well as to the importance of financial and other business covenants. Students will develop an understanding of the process whereby a transaction proceeds from a term sheet and other preliminary agreements through the drafting of final definitive documentation and the role of business professionals and lawyers in that process. This course studies the process of planning, negotiation and execution of acquisition opportunities by strategic and private equity buyers, including transaction structure options and consideration, valuation, due diligence, financial analysis, transaction documents and post-closing activity. This course also introduces students to the process by which companies renegotiate the financial contracts and commitments they have entered into with their creditors, employers, suppliers, customers, shareholders, usually in response to some financial challenge or other crisis. Often operational restructuring accompanies financial restructuring, which requires cutting costs and selling assets. Finally, the course may cover how firms end, including sale, Chapter 11 bankruptcy, out-of-court workouts, distressed exchange offers, prepackaged bankruptcy and debtor-in-possession (DIP) financing.

Credits: 3