DISQUS

D. C. Toedt · 1 year ago

I've not practiced in this area, so forgive a clueless newbie question: Am I right in assuming that asking for a secretary's certificate is an unthinking reflex by the money's lawyers, who hope to create as many possible causes of action, against as many possible individual defendants, as they can, just to give them more leverage in the future?

If that's the case, I'm curious what the real-world ROI is on the parties' collective expense of drafting, reviewing, and negotiating the certificate.

Jay Parkhill · 1 year ago

No, the officers don't sign in their personal capacities, so it
doesn't create additional defendants. It comes purely from
transactions where the document is signed on one day and closes on a
different day. In that case, it would make sense to "bring down" the
representations and warranties- which explicitly applied when the deal
was signed- to the closing date. When the sign & close are on the
same day there is no value in the certificates.

At the same time, it isn't worth everyone's time to figure out which
deals are sign/close, which ones will have a delay and which ones
*might* but no one is quite sure. The suggestion then, is to leave
the certificates in the agreement, but say that if the parties sign &
close on the same day then delivery is waived.