Deals: The Economic Structure of Transactions

Catalog description

This course focuses on the role of professionals, including lawyers of all types (corporate, tax, securities, etc.), direct private equity investors, corporate business development officers, and investment bankers, in creating value through transaction engineering. The overall goal of the course is to explore how private parties could order their commercial interactions, to develop a theory of how they ought to do this, and to gain a thorough understanding of how business deals are actually done. The course is offered in springtime terms only. The long first half of the course is devoted to analyzing impediments to transacting, including asymmetric information, exogenous risk and uncertainty, difficulties intrinsic to contracting over time, enforceability, and various forms of strategic behavior, all with a view to understanding the logic of the variety of techniques used to ameliorate them and more broadly to create distributable value through transaction structuring. These Part I classes are accompanied by exercises of various sorts. In the second part of the course, student teams apply the conceptual tools and techniques developed in the first half to analyzing the fine detail of a series of recently completed and interestingly complex transactions. Each team is given access to the original documents implementing their deal. A week of class time is devoted to each transaction. In the first (Monday) session, the student teams present their deal to the class, laying out strategic motivations, analyzing key structuring moves, and exploring the advantages and disadvantages of proceeding in the way the participants did. In the second, on the Wednesday, one or (usually) more of the professionals who worked on it will present the deal from the participant perspective, address the always interesting process questions, and take questions from the class. The requirements…