Tip of the Week- Above All Else: Seek Competent and Experienced Advisers

Who knew there were so many unique features of reverse merger transactions?  I certainly did not when I started representing clients in this area.  There are many tricks and traps that are easy to fall into even if one is an experienced securities attorney, auditor, investment banker, or operating company executive.  If there is one overarching practice tip to everything in this area, it is this: If one is considering a reverse merger or other alternative to a traditional IPO, make sure to work with practitioners experienced in doing these types of deals.

In structuring a reverse merger and getting it done, the well-trained eye of those who have been through these deals many times before is always recommended.  With changes in SEC rules, unique due diligence challenges and the like, keeping up with current trends and practice approaches requires being involved in transactions and the industry of alternative IPO financings on a fully engaged basis.

In the past, our firm has been engaged at the request of large law firms with a long-standing client which is going public through a reverse merger. The large firm stays on as general counsel and we ride in solely to complete the transaction. After the company is public, the large firm moves back in to handle all representation. Of course we protect the firm’s relationship with its client and hopefully make them look good for having brought us in! I’m sure other law firms experienced in these transactions can and do operate similarly. 

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