War Room · Deal room
Closing Night
A deal that must complete by 17:00 on Friday, and seven things that go wrong before it does.
It is Thursday, 14:00. You act for Fenwick Foods, which is buying Harlow Bakeries, a small group of three bakeries, for 4.2 million. Fenwick's bank is lending 2.5 million of it, but the bank's commitment lapses at 17:00 tomorrow, Friday. If completion has not happened by then, the money is gone and the deal probably with it. The documents are agreed in draft, and completion is planned for Friday at noon. You are the buyer's lawyer, and the team on the other side is led by Gareth Pell. The chief executive of Fenwick, Lucia Ward, has told you she wants this closed by Friday.
Who is on the call
- Lucia Ward, Chief executive of Fenwick (your client)
- Gareth Pell, Seller's lawyer
- Hana Okoro, The bank's lawyer
- Tomas Reyes, Junior at your firm
- Dev Anand, Fenwick's finance director
How this closing works in the exercise (invented)
You do not need any outside knowledge. This is the rule you must apply, and it is printed beside every step.
- Completion needs every condition on the closing checklist to be met, or waived in writing by the party the condition protects.
- The bank will fund only if its conditions are met and its lawyer is satisfied. It may refuse if it learns something it was not told.
- A document needs the signature of an authorised signatory; an electronic signature counts if the company's rules allow it and the company agrees.
- A buyer takes assets subject to any registered charge over them, unless it is released before completion.
- A seller's disclosure letter limits the seller's warranties; anything not disclosed is covered by the warranty.
- Payments must be sent only to bank details that have been checked independently, by calling a number already known to be right.
- A lawyer must not mislead the other side, or the lender, about material facts.
What can be lost
- Your client's protection: Whether Fenwick ends up with what it is paying for, and without hidden risks.
- The deal on track: Whether completion can still happen before the bank's deadline.
- Your professional position: Whether your own conduct stays beyond criticism.