DealLawyers.com Blog

Hopefully, you’ve been taking advantage of the wonderfully written stories that John has been posting in the “John Tales Blog” on this site over the past few years. Here’s the intro from one of his latest:

I was sad to see that Tom Wolfe passed away last week. If you ever want to get a feel for the Roaring 80s, his “Bonfire of the Vanities” is the obvious place to start – the glamorous life of a Wall Street “Master of the Universe” plays a prominent part in that novel’s story. This story isn’t like that. It’s about a couple of associates from a flyover state law firm who went to New York for a billion-dollar LBO closing in 1987 – and it’s really more of a cross between The Out-of-Towners and Bartleby the Scrivener.

We’d been working on the deal for several months – the company had been sold by its Fortune 50 parent company to a financial sponsor and management team in an LBO at the end of 1986. The deal was a mid-80s classic – it had been done on seller paper and highly confident letters, but had a very short fuse. In 120 days, it all turned into a pumpkin unless the parties were able to get permanent debt and equity financing in place.

There were a couple of major New York investment banks driving the deal, and they were represented by a couple of BigLaw firms. Add in the senior lenders and their lawyers, the company’s in-house staff and us, and it was a good ol’ fashioned feeding frenzy.

We were brought in to represent the management in negotiating for its equity, but because we were Ohio lawyers and this was an Ohio corporation, we also had a lot of involvement when it came to the nuts and bolts surrounding the closing of the mergers and the various financing arrangements involved in the transaction. This was the first billion dollar deal I ever worked on – and it’s still one of the biggest I’ve ever been involved with.

To say the financing arrangements were intricate is an understatement – I don’t remember all of the details, but I remember filing a resale S-1 for the deal after the closing that had so many different securities on it even the Corp Fin Staff was impressed. We called the reviewer one day to check on the status of the filing. We mentioned the name of the company, and the reviewer didn’t initially recall the filing – but then he said, “Oh, wait. . . wow, that’s the S-1 with, like, 20 different securities on it, right?” There weren’t that many, but it was nice to know we made an impression.

– Broc Romanek