SESSION 2 ASSESSMENT for CAA2425: A deep dive into corporate law and its relationship with the commercial environment

SESSION 2 ASSESSMENT for The Legal Cheek Commercial Awareness Academy 2024-25: A deep dive into corporate law and its relationship with the commercial environment – with Baker McKenzie
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1. What is a public company?*

A company that owns a majority of shares in a number of smaller companiesA company whose shares are traded freely on a stock exchangeA large company whose activities are often discussed by the mediaA company whose shares are owned by founders, executive management, and private investors
2. What is an asset purchase?*

A deal in which the buyer acquires all the assets of a business by purchasing all the target company’s sharesA deal in which the buyer assumes all the target business’s liabilityA deal in which the buyer acquires selected rights and assets from a target companyA deal in which two companies combine their assets to form one new company
3. A private equity firm is looking to sell a company and is keen to secure a “clean break”. Which TWO of the following features would you be likely to find in this deal?*

Buyer-side warranty and indemnity (W&I) insuranceA long list of representations, warranties and indemnitiesA locked box closing mechanismA purchase price which can be easily adjusted
Q3 calculation
4. Your firm is assisting on an acquisition in which the key asset of the target company is its people. Which ONE of the below teams would be most heavily involved in the due diligence process?*

Real estateTaxEmploymentIntellectual property
5. If a target’s key asset is its people, what might a buyer do to try to retain the business’s management team? Select THREE.*

Buy the target company as quickly as possiblePay the management team’s consideration staggered over two or three yearsAdd non-compete clauses to the share purchase agreementAgree that the management team will be paid more if they meet certain financial targets in the future
Q5 calculation
6. You are assisting on the sale of a business which is fully integrated into your client’s company and is not a standalone business. Which type of buyer will it be MOST DIFFICULT to sell this business to?*

A competitor company in the same industryA large well-established company looking to move in to this industryA smaller company in the same industryPrivate equity buyers
7. How might a seller make a fully integrated, not standalone business more appealing to potential buyers?*

Agreeing to give the business access to some of the seller’s assets for a transitional period after completion of saleAsking for a higher purchase priceNot disclosing which assets are owned by the businessHolding payment in escrow until the transaction has been completed
8. How might a buyer respond to the risks of a proposed transaction? Select THREE.*

Reducing the purchase priceUsing a Heads of Terms agreementSecuring indemnities against specific risksAbandoning the deal
Q8 calculation
9. Understanding your client’s business is key to being a successful corporate lawyer. How would you go about getting to know a business better? Select THREE.*

Set up conversations with members of the businessBuild your knowledge of the sector the business operates inWait for the business to come to you with their concernsLook at the business’s annual report
Q9 calculation
10. Which TWO of the following are trends which have affected M&A deal activity over the last few years?*

Junior lawyers being paid higher salariesA rise of class actions and group litigation claims in the English courtsLarger businesses divesting their non-core business lines to focus on their core businessChanging interest rates creating uncertainty around the price of debt
Q10 calculation
Calculation
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SESSION 2 ASSESSMENT for The Legal Cheek Commercial Awareness Academy 2024-25: A deep dive into corporate law and its relationship with the commercial environment – with Baker McKenzie