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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Banking and Finance

Date & Time
  • event Date

    Tuesday, February 25, 2025

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.


  • Live Online


    On Demand

$347.00

This course is $0 with these passes:

CLE
ALL

This CLE course will discuss the risks and benefits of preferred stock, as well as expected developments in light of the changing market landscape. The program will discuss drafting and other considerations.

Faculty

Hillary H. Holmes
Partner and Co-Chair, Capital Markets Practice Group
Gibson, Dunn & Crutcher LLP

Ms. Holmes is a partner in the Houston office of Gibson, Dunn & Crutcher, Co-Chair of the firm’s Capital Markets Practice Group, and a member of the firm’s Securities Regulation & Corporate Governance, Mergers & Acquisitions, ESG, and Energy & Infrastructure practice groups. She serves as co-partner-in-charge of the Houston office and as a member of the firm’s Executive Committee. Ms. Holmes advises corporations, investment banks and institutional investors on long-term and strategic capital raising. She counsels boards of directors, special committees and financial advisors in M&A transactions, take privates and complex situations. Ms. Holmes also regularly advises companies on securities laws, corporate governance and ESG issues. She brings a deep expertise in the energy industry.

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Eric M. Scarazzo
Partner
Gibson, Dunn & Crutcher LLP

As a key member of the firm’s Capital Markets Practice, Mr. Scarazzo is involved in some of the firm’s most complicated and high-profile securities transactions.  Additionally, he has been a certified public accountant for nearly 20 years.  His deep familiarity with both securities and accounting matters permits Mr. Scarazzo to play an indispensable role supporting practice groups and offices throughout the firm.  He provides critical guidance to clients navigating the intersection of legal and accounting matters, principally as they relate to capital markets financings and M&A disclosure obligations.

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Description

Preferred stock provides investors two key benefits: a liquidation preference over common stock if the company is sold or liquidates and, if convertible, the right to convert into common stock if the company's value increases significantly. Preferred stock provides companies with two key benefits: raising capital in a challenging environment and issuing a debt-like instrument with equity-like treatment.

Key stock provisions include liquidation preferences, conversions, and anti-dilution protection. The issuer must also consider tax and accounting considerations. Drafters of stock provisions must be precise and clear in setting forth rights, powers, and preferences.

Listen as our authoritative panel analyzes the pros and cons and features of convertible preferred stock. The program will cover drafting considerations and essential terms for these arrangements, tax issues for investors, employees, and companies, and new developments and trends under the current economic environment.

Outline

  1. Preferred stock: pros and cons
  2. Key structuring characteristics
    1. Participating vs. nonparticipating
    2. Capped or not
    3. Board seats
    4. Negative covenants
    5. Tag-along and drag-along rights
    6. Preemptive rights
    7. Redemption rights

Benefits

The panel will review these and other key issues:

  • What are the benefits and risks for investors in acquiring preferred stock?
  • What are the risks and benefits for companies issuing preferred stock?
  • What are the critical considerations in drafting preferred stock provisions?
  • What new developments are expected in light of current market conditions?
  • What are the tax and accounting considerations?