Drafting Shareholder Agreements for Private Equity M&A Deals

Structuring Provisions on Board Composition and Duties, Drag-Along, Tag-Along, Information Rights, and More

Recording of a 90-minute CLE webinar with Q&A


Conducted on Thursday, January 4, 2018

Recorded event now available

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Program Materials

This CLE webinar will provide guidance to deal counsel for drafting shareholder agreements that accompany private equity (PE) transactions. The panel will examine considerations and best practices to ensure that shareholder agreements are effective and binding on shareholders throughout the life cycle of the investment, including an M&A-related exit.

Description

In PE deals, the PE investors and existing shareholders enter a shareholder agreement that outlines the rights and obligations of the shareholders to one another and the company. The shareholder agreement addresses board control, drag-along rights of the PE investors, tag-along rights of management and minority investors, restrictions on equity transfers, buy-sell arrangements, and much more.

The seminal Delaware Court of Chancery case, Cigna Health & Life Ins. Co. v. Audax Health Solutions, highlighted the importance of ensuring that shareholder agreements contain an agreement to be bound by indemnity and other post-closing obligations following an M&A-related exit from a PE investment.

Shareholder agreements that are carefully drafted to comport with the intent of the PE investors and existing shareholders are most likely to be enforced in litigation.

Listen as our authoritative panel of deal counsel discusses key provisions in shareholder agreements that accompany PE deals, and legal considerations that should be taken into account to ensure that agreements are effective and enforceable.

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Outline

  1. Key provisions in shareholder agreements
    1. Board of directors composition and duties
    2. Treatment/waiver of corporate opportunities
    3. Appointment and removal of officers
    4. Voting rights
    5. Information rights
    6. Transfer restrictions
    7. Resolving deadlock
    8. Preemptive rights
    9. Amendment and termination of shareholder agreement
    10. Governing law
  2. Best practices for binding and enforceable agreements

Benefits

The panel will review these and other key issues:

  • What are the key provisions in shareholder agreements and what potential pitfalls can affect their enforceability and effectiveness?
  • What common legal challenges are likely to arise during the drafting and enforcement of shareholder agreements—and how can they most effectively be resolved?
  • What is the relationship between shareholder agreements and the M&A transaction documents—and how are conflicts among the documents resolved?

Faculty

Stark, Lisa
Lisa R. Stark

Partner
K&L Gates

Ms. Stark has nearly 15 years of corporate experience in mergers and acquisitions, strategic investments, initial...  |  Read More

Schreiber, Stephanie
Stephanie Winer Schreiber

Shareholder
Buchanan Ingersoll & Rooney PC

Ms. Schreiber focuses her practice on substantial M&A transactions, joint ventures, general corporate matters,...  |  Read More

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