Corporate

Overview

Headquartered in New York, the financial center of the world, Dai & Associates’ corporate group provides the industry experience and global resources and reach to help our clients. We build internationally coordinated, multidisciplinary teams to best serve our clients and address their unique needs. Our corporate practice combines a full-service transactional practice with proactive, strategic business counseling. We counsel clients in all phases of the business cycle, from advising innovative startups in search of financing, to representing companies in transactions and ongoing capitalization efforts, to providing counsel on corporate governance and risk management. Our goal is not only to effectively and efficiently meet the needs of our clients, but to serve as strategic business advisors to help our clients achieve their short- and long-term goals.

Corporate Counseling, Governance & Compliance

We offer a fully integrated approach to serving our clients' general corporate needs. We counsel, advise and represent boards of directors, board committees, officers and others with respect to issues relating to corporate governance, business judgment, disclosure obligations and compliance matters arising under applicable federal and state laws, including securities laws. We are committed to educating our clients with continual updates on developments from U.S. Securities and Exchange Commission (“SEC”) regulations and other standards governing public company conduct.

Our attorneys frequently advise corporations and other entities, boards of directors, board committees, officers, shareholders, and other parties regarding:

Board and committee best practices, composition, and procedures.
Board oversight and self-evaluation systems.
Board committee charters, guidelines, codes of conduct and other programs and policies.
Director and officer fiduciary duties and responsibilities.
Chief executive officer (“CEO”)/chief financial officer (“CFO”) certifications.
Executive compensation and succession.
Financial reporting and internal investigations.
Preparation of proxy statements for annual and special meetings.
Regulatory disclosure requirements.

Each company is an internal system encompassing policies, processes and people, which serves the needs of shareholders and other stakeholders, by directing and controlling management activities with good business savvy, objectivity, accountability and integrity. It is reliant on external marketplace commitment and legislation, plus a healthy board culture which safeguards policies and processes. Attorneys of the Firm aim to ensure that clients have in place comprehensive programs to guide them and their employees in conducting business ethically and in compliance with legal and regulatory requirements.

Our Firm follows a cost-effective team approach in developing and updating clients’ compliance programs. Our attorneys modify program policies and procedures or, as appropriate, utilize our own program design, working closely with client personnel. The extent of our attorneys’ involvement in each compliance program engagement depends on a number of factors, including client cost constraints, the scope and adequacy of existing client programs, and the availability of client personnel to assume responsibility for portions of the project.

Our compliance program design includes the following features:

Risk analysis and identification of substantive areas in which compliance policies are needed;
Code of conduct and related policy creation and refinement;
Program organization, including compliance officer selection and compliance committee membership;
Development of effective code and policy distribution and employee training and education;
Creation of monitoring and auditing procedures, including reporting systems, to evaluate program effectiveness;
Establishment of a framework for discipline, program revision, and corrective action;
Program documentation; and
Board and management oversight of compliance and ethics programs.

Our attorneys also advise clients on the management of claims, litigation and other legal risks. The significant risk of substantial legal exposure (organizational and individual fines, penalties, imprisonment and possible debarment from government contracts) as well as image-damaging publicity can be substantially reduced by having an effective ethics and compliance program and sound corporate governance practices.

Corporate Finance

Leveraged Finance

We represent commercial banks, investment banks, private equity sponsors and corporate borrowers in the leveraged syndicated lending market. Our lawyers have excellent structuring, financing and deal management skills, as well as significant international experience. In particular, our lawyers are well known for innovative and creative approaches to complex financing transactions.

Our practice in the leveraged lending area consists primarily of representing senior institutional lenders and borrowers in the following types of transactions:

Leveraged buyouts
First and second lien loan structures
Leveraged recapitalization financings
Senior and subordinated bridge financings
Asset-based loan financings
Mezzanine financings
Secured lending

We represent leading middle-market private equity funds, including buyout and venture capital funds, in their portfolio investment activities. We provide legal services such as:

Structuring, negotiation, and execution of leveraged buyout transactions
M&A work for portfolio companies
Going-private transactions
Private Investments in Public Equity (“PIPEs”)
Minority investments
Management compensation programs

Asset-Based Lending

We represent a wide range of asset-based lenders and borrowers in documenting and structuring asset-based lending transactions globally. Our practitioners have been active participants in this market for a number of years and are well-versed in structuring around complex receivables issues, including those related to prohibitions on assignment, confidentiality, "lock box" cash collections, transfer pricing and related matters. Our experience across jurisdictions has given us an understanding of issues surrounding the granting and perfection of security interests in many jurisdictions in which asset-based lenders operate.

Private Placement

Private placements, or the sale of securities to a relatively small number of select investors as a way of raising capital, are often deemed the “all-stars” of the capital market. Businesses that engage in private placement do so because of its attractive rate of returns and its potential to be senior in the investment chain. Private placements will be the first stop for a venture capital or entrepreneurial client, or an alternative for a well-established issuer needing to raise capital when the public equity markets are unavailable. Our attorneys regularly advise issuers and investors in connection with private placements of equity, debt and hybrid securities.

Debt Offerings

We advise on investment grade debt issuances. We also regularly advise issuers and underwriters on Tier 1 offerings, convertible debt offerings and high yield offerings.

Debt offerings are debt instruments offered for purchase by private investors - normally with warrants for future stock purchases at fixed prices. This is a way for companies to raise debt financing by selling notes with a set annual return rate and a schedule on when the full payment will be made to investors. This is very similar to a private business loan. Using a debt offering, a company can avoid giving up ownership or future profit in the business. We counsel our clients in connection with medium-term note programs, commercial paper programs, and other continuous offering programs.

Debt Repurchases, Exchange Offers & Tenders

Many debt securities can trade significantly below their face values. This creates an attractive opportunity for issuers to repurchase their debt at discounts. When an issuer embarks on a systematic program of repurchasing debt securities, it may be treading into the territory of tender offers and may subject itself to disclosure and filing obligations pursuant to the SEC’s tender offer rules.

We provide a wide array of services to emerging growth companies at all stages of development, including financing and other strategic transactions and exits like debt repurchases, exchange offers and tenders.

Acquisition Financing

Acquisition financing can be a loan, line of credit, equity, or a combination of all three. The financing is based on the value of the business or other assets being acquired and can include the future earnings stream and assets less any liabilities. Every successful buy-side deal starts with a well-defined process and upfront advice on potential pitfalls and deal breakers. Our acquisition professionals follow a disciplined, process-oriented approach to acquisition that is driven to achieve positive results. Our acquisition team assists clients on developing and refining their acquisition criteria and negotiating and structuring a deal that seeks to meet the value expectations of all parties involved.

Real Estate Financing

Our real estate lawyers are experienced in representing lenders and borrowers in all types of real estate financing transactions, including acquisition financings, mezzanine loans/preferred equity investments, leasehold financing loans and construction lending transactions.

Our real estate financing practice that includes the representation of real estate lenders, borrowers and investors in ordinary-course, complex, and highly structured transactions. In addition to our general financing practice, we have developed specialties in private placement real estate investments.

Whether we are structuring highly profitable transactions in the international and American markets or advising clients on U.S. projects, our attorneys are at the cutting edge of local and global real estate financing. Our group is a provider of legal services in a broad area of real estate financing, from inception to closing date. We have the resources to guide you in achieving your business goals in real estate finance.

Our financing attorneys are actively involved in these areas:

Syndicated Lending

The primary goal of syndicated lending is to spread a borrower’s risk of a default across multiple lenders. Syndicated loans tend to be much larger than standard bank loans, resulting in the loan being classified as “high risk” because even one borrower defaulting could cripple the syndicated loan as a whole. Syndicated loans are also used in the leveraged buyout context to fund large corporate takeovers with predominantly debt funding.

Syndicated loans can be made on a “best efforts” basis, meaning that if not enough investors are found, the syndicated loan the borrower receives will be lower than originally anticipated. These loans can also be split amongst the lenders; for example, a borrower can receive a syndicated loan from a bank, who funds standard lines of credit, and institutional investors, who fund fixed-rate term loans.

Mezzanine Financing

Mezzanine financing can offer favorable opportunities for investors. However, it is important to our Firm to find a financing method that is best suited for each client’s needs, and mezzanine financing is not ideal in all situations. We recommend providing mezzanine financing to borrowers whose interests are aligned with those of the mezzanine provider and the first mortgage lender, but we do not recommend lending to borrowers who are subject to significant moral hazards.

Historically, mezzanine financing became an important source of capital for commercial real estate acquisitions, development and refinancings as traditional first mortgage providers became more reluctant to finance projects. The increased conservatism of lenders created a gap between what lenders were willing to provide and what borrowers wanted from these debt sources. This is when mezzanine financing emerged to fill the gap. The result ever since has been the increased segmentation of capital structuring for specific real estate transactions. The challenge for finance providers is to price the mezzanine segment in a way that will provide sufficient compensation for the risk taken by the lenders.

Mortgage Lending

A mortgage loan is a loan secured by commercial or residential property, such as a house, an office building, shopping center or apartment complex. The proceeds from a mortgage loan are typically used to acquire, refinance or redevelop real property.

Our Firm is experienced in both residential and commercial mortgage lending matters. Both such mortgage loans are structured to meet the needs of the borrower and the lender. As our clients’ attorneys, we assist throughout the entire process, including, but not limited to, helping our clients negotiate the loan amount, interest rate, maturity term, amortization schedule and prepayment flexibility. Commercial mortgages, more than residential ones, are generally subject to extensive underwriting and due diligence prior to closing. It is important for clients who wish to engage in mortgage lending to communicate and work closely with their attorneys to ensure their needs are met.

Leasehold Financing

A leasehold mortgage is an encumbrance or lien on a tenant’s interest in a lease conveyed to a lender as collateral for a loan to the tenant. The most obvious benefit of a leasehold mortgage arrangement is that it allows a tenant to proceed to develop a leased premise without spending all of its on-hand assets. Once the improved leased premise begins generating income, the tenant has the option to pay both the rent under the lease and the debt service on the loan secured by the leasehold mortgage.

The use of a leasehold mortgage for financing creates unique relationships among the tenant, the tenant’s lender or leasehold mortgagee, the landlord and the landlord’s lender or fee mortgagee. The relationships among all 4 parties are controlled generally by the lease, which may be negotiated and executed by the tenant and the landlord prior to the creation of either mortgage interest. All parties involved should retain legal counsel to do the necessary due diligence to bring to their attention to the various issues associated with leasehold mortgage financing.

Construction Lending

Generally, a construction loan is any value added loan where the proceeds are used to finance construction of some kind. In the U.S. Financial Services industry, however, a construction loan is a very specific type of loan, designed for construction and creating interest reserves, where repayment ability may be based on something that can only occur when the project is built. Our attorneys are skilled in helping our clients navigate special monitoring guidelines that are above normal loan guidelines to ensure that the project is successfully completed, allowing repayment to take place.

Complex Debt Restructurings

We are able to provide fully integrated advice across the entire credit cycle, from the origination of the debt to amendments, debt buy-backs, refinancings and the restructuring and renegotiation of debt instruments in capital structure. Dai & Associates represents both borrowers and lenders in relation to the restructuring of a wide range of financings involving various industries. Our experience extends to both in- and out-of-court restructurings, financial recapitalizations, business reorganizations and liquidations. We advise on insolvency issues in corporate and financing transactions and on distressed debt trading and securities issues.

We are experienced at negotiating with various tiers of creditors, who have disparate rights and objectives, and marshalling them toward a negotiated solution that allows all parties to move forward with a financing package and avoid the potentially damaging alternative of a formal insolvency process.

Bankruptcy and Financial Restructuring

Our professionals have experience in both litigation and transactional aspects of bankruptcy and financial restructurings, acquisition and investment transactions and commercial collections, and have the ability to spot and resolve the various legal, business and financial issues in the complicated bankruptcy and restructuring proceedings based on the support of our professionals from other practices.

We also strategically work with other prestigious law firms and professionals in the area with local offices in different regions to gain access to different federal bankruptcy courts and to handle all types of complex bankruptcy and restructuring matters. Our professionals have the ability to represent clients including:

Debtors in possession
Creditors’ committees
Private equity funds
Acquirers and sellers of troubled companies and distressed assets
Licensors and licensees of intellectual property
Stockholders, bondholders and parties with other debt, equity or quasi-equity positions
Banks and other traditional and nontraditional lenders
Officers and directors of companies in financial distress
Insurers and insureds
Trade creditors, including manufacturers, service providers, material suppliers, contractors and subcontractors
Commercial landlords and tenants
Other parties involved in every type of restructuring, bankruptcy and other proceedings

With the development of the globalization, especially the increase of the trade and business between United States and China, more opportunities can be found in the cross-border transactions combining high-quality US assets with Chinese huge markets. The US bankruptcy system offers clean, high quality, and low valuation companies and assets, which make it a great source of the targets for cross-border mergers and acquisitions. The resources in the US bankruptcy court system help us gain rapid access to attractive targets. Our thorough understanding of the demands of Chinese clients and our expertise in both bankruptcy and corporate fields ensure the clients receive efficient and seamless service.