Recently Closed – Complex Transaction Representing Purchaser of Accounts for a Fortune 500 Company Seller
Recently closed a transaction representing the Purchaser of accounts for a Fortune 500 company seller.
The transaction involved factoring only specified accounts from particular obligors. In this sense, the mechanics were far more complicated than many structures as my client had to be able to continuously monitor what receivables were its and what were not (as opposed to transactions in which ALL of the receivables of a particular obligor are sold).
The resolution for that involved electronic data delivery (including electronic records with regard to each proposed purchase, as well as various covenants with regard to internal systems of the seller – all of which had to work with the seller’s accounting and It systems). A servicer with the appropriate data systems and software was engaged to monitor and massage the data deliveries and report as to eligibility etc. The deliveries were all electronically signed (I even developed a new defined term “Electronic Delivery” to cover the electronic signature as well as the nature of digital files being delivered.
The deal also was off balance sheet to the seller (as per a Big 3 firm – which received a true sale opinion from a specially engaged independent counsel for the seller). Since the seller had both secured medium term notes and a secured revolver, I also negotiated intercreditor arrangements (which were more than usually complex).