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FALL /
WINTER 2009
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special report:
the center shifts
The “credit crisis” is about more than
credit; it’s an unprecedented crisis of faith in our
financial system. As businesses try to cope with one
of the worst recessions in generations, Washington,
DC, has become, arguably, the nation’s leading
financial center, and a new “recrimination and
regulation” culture has emerged. In this Special
Report, a look at the challenges and opportunities.
Plus: Finding credit, and rethinking hedge funds..
...Read
more
THE CREDIT CRUNCH: "Not all gloom and doom"
Credit has dried up throughout the economy. But forceful U.S. government action has reassured global investors and may speed recovery.
...Read
more
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WHAT WE KNOW
NOW
It would be
great if we could say, a year into the recession,
two quarters after the collapse of so many fabled
institutions, that we really understood what
happened and were clear on what we have to do going
forward. But, as pundit after pundit reminds us,
we’re still searching for answers; many
businesspeople remain frozen in their tracks. We
remember the way the world used to be. And we’re
getting a better sense for how it is now. But the
rules have changed (and new regulations don’t seem
far behind). The players are different (and not just
because there was an election). And the centers of
influence have shifted, with Wall Street giving way,
on more fronts than ever imagined, to Washington,
DC.
With this
Special Issue of Capital Thinking, we’re
trying to add to the knowledge base, to shed some
light on where things are—and where they’re likely
to go. Toward that end, we’ve assembled several
dozen experts—on banking and investment, on real
estate and technology, on regulations and politics,
on accounting and project finance, on domestic
issues and international affairs—to take a look at
what Washington’s new role means for business; to
assess the options available to companies seeking
credit; to forecast near-term developments in health
care, technology, banking, and energy; to identify
some of the new financial movers and shakers.
Along the way,
Blue Wolf’s Adam Blumenthal advises business on
recession survival strategies. Patton Boggs’
Jeff Turner looks at the challenges facing the
new administration. CBRE’s Vance Maddocks finds
silver linings in commercial real estate. And you,
we hope, will leave these pages knowing more than
you did when you entered, with a clearer map to the
road ahead.
MIKE WINKLEMAN
Editorial Director
INSIDE THIS ISSUE:
Assessing IP during a recession. The outlook for
federal antitrust enforcement. How high-tech
campaigning is changing business. Complying with the
FCPA.
...Read more
Jeff Turner looks at the Obama administration’s
priorities. Joe Berry Jr. and Thomas Killian explore
the risk of bank takeovers. Vance Maddocks describes
commercial real estate opportunities.
...Read more
Adam Blumenthal - Blue Wolf Capital Management’s
managing partner explains what businesses need to do
to survive the recession—and plan for its aftermath.
...Read more |
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New rules for
m&a during the downturn |
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By
Akash Sethi |
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1 |
Conduct Reverse Due Diligence:
Know the skeletons in your closet that may
affect value or financing. |
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2 |
Be Proactive: Address
potential customer, supplier or other issues
before engaging in a sale process. |
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3 |
Minimize Financing Risk:
Understand your buyer’s credit risk and
financing sources, conditions and terms
which may affect its ability to close or pay
seller finance obligations. |
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4 |
Evaluate Third-Party Risk:
Assess credit and industry risk of
customers, suppliers and other
counterparties. |
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5 |
Watch for Government “Hot Buttons”:
Review seller compliance programs (or
lack thereof) in light of current government
enforcement actions even in non-regulated
industries, e.g., FCPA. |
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6 |
Analyze Public Policy Risk:
Examine how new or pending legislation will
impact value or provide opportunities. |
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7 |
Understand Exposure to Government Contracts:
Engage experts familiar with rules and risks
to review contracts or investments. |
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8 |
Communicate Value: Clearly
communicate the issues that may impact your
valuation or investment decision to the
diligence team. |
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9 |
Appreciate Foreign Risks:
Understand a seller’s operations in foreign
markets and the impact of foreign regulatory
requirements and cultural sensitivities. |
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10 |
Establish Issue Teams: Do not
rely on generic checklists; establish
issues-based teams led by specialists who
can focus on significant issues that affect
value or risk. |
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