In-House Counsel’s Role In Sale Of A Private Company

In-house counsel need to understand some key strategic, negotiating, and diligence considerations involved in the sale of a privately held company. In their article, Richard D. Harroch and David A. Lipkin provide a list of important considerations. The selling company’s in-house counsel will be expected to participate in presentations to their board about fiduciary responsibilities in connection with the sale, its risks and potential liabilities, key terms of any letter of intent, antitrust or other regulatory hurdles, and the scope of representations and warranties. Confidentiality is critical. Make sure that all potential bidders have signed a non-disclosure agreement, including “non-solicitation” provisions that prohibit bidders from soliciting or hiring your company’s employees (or at least its key employees) for an appropriate period of time. Hold regular “all hands” meetings that include all members of the deal teams, including outside counsel. Don’t assume that everyone on the team has the same information. Use the meetings to share and disseminate vital information. Identify key intellectual property issues, and take pains to understand the deal’s dynamics, including which party has the leverage, and whether multiple bidders can be played against each other.