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  • 1.

    What territory’s law typically governs the transaction agreements? Will courts in your jurisdiction recognise a choice of foreign law or a judgment from a foreign jurisdiction?

  • 2.

    Does the legal and regulatory regime in your jurisdiction restrict acquisitions by foreign entities? Are there any restrictions on cross-border lending?

  • 3.

    What are the typical debt components of acquisition financing in your jurisdiction? Does acquisition financing typically include subordinated debt or just senior debt?

  • 4.

    Are there rules requiring certainty of financing for acquisitions of public companies? Have ‘certain funds’ provisions become market practice in other transactions where not required?

  • 5.

    Are there any restrictions on the borrower’s use of proceeds from loans or debt securities?

  • 6.

    What are the licensing requirements for financial institutions to provide financing to a company organised in your jurisdiction?

  • 7.

    Are principal or interest payments or other fees related to indebtedness subject to withholding tax? Is the borrower responsible for withholding tax? Must the borrower indemnify the lenders for such taxes?

  • 8.

    Are there usury laws or other rules limiting the amount of interest that can be charged?

  • 9.

    What kind of indemnities would customarily be provided by the borrower to lenders in connection with a financing?

  • 10.

    Can interests in debt be freely assigned among lenders?

  • 11.

    Do rules in your jurisdiction govern whether an entity can act as an administrative agent, trustee or collateral agent?

  • 12.

    May a borrower or financial sponsor conduct a debt buy-back?

  • 13.

    Is it permissible in a buy-back to solicit a majority of lenders to agree to amend covenants in the outstanding debt agreements?

  • 14.

    Are there restrictions on the provision of related company guarantees? Are there any limitations on the ability of foreign-registered related companies to provide guarantees?

  • 15.

    Are there specific restrictions on the target’s provision of guarantees or collateral or financial assistance in an acquisition of its shares? What steps may be taken to permit such actions?

  • 16.

    What kinds of security are available? Are floating and fixed charges permitted? Can a blanket lien be granted on all assets of a company? What are the typical exceptions to an all-assets grant?

  • 17.

    Are there specific bodies of law governing the perfection of certain types of collateral? What kinds of notification or other steps must be taken to perfect a security interest against collateral?

  • 18.

    Once a security interest is perfected, are there renewal procedures to keep the lien valid and recorded?

  • 19.

    Are there ‘works council’ or other similar consents required to approve the provision of guarantees or security by a company?

  • 20.

    Can security be granted to an agent for the benefit of all lenders or must collateral be granted to lenders individually and then amendments executed upon any assignment?

  • 21.

    What protection is typically afforded to creditors before collateral can be released? Are there ways to structure around such protection?

  • 22.

    Describe the fraudulent transfer laws in your jurisdiction.

  • 23.

    What documentation is typically used in your jurisdiction for acquisition financing? Are short-form or long-form debt commitment letters used and when is full documentation required?

  • 24.

    What levels of commitment are given by parties in debt commitment letters and acquisition agreements in your jurisdiction? Fully underwritten, best efforts or other types of commitments?

  • 25.

    What are the typical conditions precedent to funding contained in the commitment letter in your jurisdiction?

  • 26.

    Are flex provisions used in commitment letters in your jurisdiction? Which provisions are usually subject to such flex?

  • 27.

    Are securities demands a key feature in acquisition financing in your jurisdiction? Give details of the notable features of securities demands in your jurisdiction.

  • 28.

    What are the key elements in the acquisition agreement that are relevant to the lenders in your jurisdiction? What liability protections are typically afforded to lenders in the acquisition agreement?

  • 29.

    Are commitment letters and acquisition agreements publicly filed in your jurisdiction? At what point in the process are the commitment papers made public?

  • 30.

    What restrictions are there on the ability of lenders to enforce against collateral?

  • 31.

    Does your jurisdiction allow for debtor-in-possession (DIP) financing?

  • 32.

    During an insolvency proceeding is there a general stay enforceable against creditors? Is there a concept of adequate protection for existing lien holders who become subject to superior claims?

  • 33.

    In the course of an insolvency, describe preference periods or other reasons for which a court or other authority could claw back previous payments to lenders? What are the rules for such clawbacks and what period is covered?

  • 34.

    In an insolvency, are creditors ranked? What votes are required to approve a plan of reorganisation?

  • 35.

    Will courts recognise contractual agreements between creditors providing for lien subordination or otherwise addressing lien priorities?

  • 36.

    How is the claim of an original issue discount (OID) or discount debt instrument treated in an insolvency proceeding in your jurisdiction?

  • 37.

    Discuss potential liabilities for a secured creditor that enforces against collateral.

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VANDENBULKE is a unique independent law firm exclusively specialized in Corporate, Finance and Tax law.  The firm is the leader in highly specialized services to world-class Institutional Investors electing to use Luxembourg as an international finance platform.

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Luxembourg
35 Avenue Monterey
2163
Luxembourg
Luxembourg
T: +352 26 38 33 50
F: +352 26 38 33 49


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