Legal news and trends for Canadian in-house counsel and c-suite executives
Issue link: https://digital.canadianlawyermag.com/i/1181006
22 www.canadianlawyermag.com/inhouse York, California and Asia, there were multiple jurisdictions and time zones to deal with so considerable care had to be taken in the preparation of reps of warranties. Pawar and his team now continue to represent the client in the post-acquisition world. Representational warranty insurance has become increasingly popular as a tool to deal with liabilities that can otherwise seem overwhelming, Kruse notes. This can be a useful tool for determining who is going to be liable for preclosing issues. Blakes recently oversaw the sale of a large Caribbean-based gas retailer, Sol Ltd, to a Canadian public company, Parkland Fuel in a $1.6-billion transaction. The project presented challenges due to the fact that Sol operated in 23 different countries, so numerous jurisdictions were involved. "A lot of co-ordination was required to stay on top of the different regulations," says Kruse. Earlier this year, Bombardier completed the acquisition of Triumph Group's Global 7500 wing manufacturing operations in a relatively straightforward transaction. "We were mindful of and well advised on some jurisdictional particularities, so there didn't end up being hurdles," says Nicholas Cerminaro, associate general counsel at Bombardier. In any cross-border M&A, Cerminaro advises getting educated on the particularities as early as possible to avoid complications. In a more challenging transaction, Dickinson Wright recently represented a Canadian firm that was the target of an acquisition by a U.S.-based family office. The buyer's California-based lawyer wanted to use Californian acquisition documents that were not acceptable in Canada. "We had a struggle to get them away from those documents. Even when you have a fully backed transaction on a large deal, you can still face wrinkles," says Mark Redinger, a partner at Dickinson Wright LLP. "It's really a marathon, not a sprint. There are going to be ups and downs." In another transaction handled by Dickinson Wright, during the sale of a Canadian manufacturer to a U.S. private equity firm, the U.S. bank that was funding a portion of the purchase requested a clearance document that was not accessible from the Canadian bank, presenting another obstacle that the team overcame. According to Orysiuk, the detail in transi- tional service agreements is every bit as impor- tant as the terms of the agreement itself. "I think it's important for legal to work closely with the internal team that is preparing the service schedules to ensure that they capture the appropriate level of detail and accurately reflect expectations," she says. Lawyers agree that the volume of foreign investors setting their sights on Canada shows no sign of slowing. "We are seeing significant cross-border M&A work and I see it continuing. That's just the way of the world," says Redinger. FOREIGN DIRECT INVESTMENT IN CANADA – (DOLLARS) 2014 > 744,671 2015 > 782,912 2016 > 810,668 2017 > 834,757 2018 > 876,856 Source: Statistics Canada "One challenge that in-house lawyers face is to make sure that they get out in front of things that might be gating issues that would be particular to cross-border transactions." David Kruse, Blake Cassels & Graydon LLP CROSS BORDER