I am a stupid K-JD who doesnt understand Corporate law. Help

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Anonymous User
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I am a stupid K-JD who doesnt understand Corporate law. Help

Postby Anonymous User » Sat Aug 10, 2013 10:58 pm

What exactly is "Capital MArkets"? leveraged loan transactions? Mega-buyouts? I am trying to understand what firms like Cahill do. I understand the litigation side and kind of the M&A side but clueless as to many other aspects. About to go on some interviews (rising 2L) so all help is appreciated

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guano
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Re: I am a stupid K-JD who doesnt understand Corporate law. Help

Postby guano » Sat Aug 10, 2013 11:07 pm

Anonymous User wrote:What exactly is "Capital MArkets"? leveraged loan transactions? Mega-buyouts? I am trying to understand what firms like Cahill do. I understand the litigation side and kind of the M&A side but clueless as to many other aspects. About to go on some interviews (rising 2L) so all help is appreciated

Have you tried google or Wikipedia? Investopedia?
Start there, because the answers to such basic questions will be much better than what you get here. If you have more specific questions, fire away. There are people here with the requisite knowledge

NYstate
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Re: I am a stupid K-JD who doesnt understand Corporate law. Help

Postby NYstate » Sat Aug 10, 2013 11:11 pm

Anonymous User wrote:What exactly is "Capital MArkets"? leveraged loan transactions? Mega-buyouts? I am trying to understand what firms like Cahill do. I understand the litigation side and kind of the M&A side but clueless as to many other aspects. About to go on some interviews (rising 2L) so all help is appreciated


Aaaaaaaaugh. This is painful.

Anonymous User
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Re: I am a stupid K-JD who doesnt understand Corporate law. Help

Postby Anonymous User » Sat Aug 10, 2013 11:14 pm

NYstate wrote:
Anonymous User wrote:What exactly is "Capital MArkets"? leveraged loan transactions? Mega-buyouts? I am trying to understand what firms like Cahill do. I understand the litigation side and kind of the M&A side but clueless as to many other aspects. About to go on some interviews (rising 2L) so all help is appreciated


Aaaaaaaaugh. This is painful.


I agree plz help

guano wrote:
Anonymous User wrote:What exactly is "Capital MArkets"? leveraged loan transactions? Mega-buyouts? I am trying to understand what firms like Cahill do. I understand the litigation side and kind of the M&A side but clueless as to many other aspects. About to go on some interviews (rising 2L) so all help is appreciated

Have you tried google or Wikipedia? Investopedia?
Start there, because the answers to such basic questions will be much better than what you get here. If you have more specific questions, fire away. There are people here with the requisite knowledge


Been researching it for awhile and still kinda confused... help?

Anonymous User
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Re: I am a stupid K-JD who doesnt understand Corporate law. Help

Postby Anonymous User » Sat Aug 10, 2013 11:21 pm

these words "Business Reorganization & Financial Restructuring" make no sense to me :(

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guano
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Re: I am a stupid K-JD who doesnt understand Corporate law. Help

Postby guano » Sat Aug 10, 2013 11:23 pm

Anonymous User wrote:
NYstate wrote:
Anonymous User wrote:What exactly is "Capital MArkets"? leveraged loan transactions? Mega-buyouts? I am trying to understand what firms like Cahill do. I understand the litigation side and kind of the M&A side but clueless as to many other aspects. About to go on some interviews (rising 2L) so all help is appreciated


Aaaaaaaaugh. This is painful.


I agree plz help

guano wrote:
Anonymous User wrote:What exactly is "Capital MArkets"? leveraged loan transactions? Mega-buyouts? I am trying to understand what firms like Cahill do. I understand the litigation side and kind of the M&A side but clueless as to many other aspects. About to go on some interviews (rising 2L) so all help is appreciated

Have you tried google or Wikipedia? Investopedia?
Start there, because the answers to such basic questions will be much better than what you get here. If you have more specific questions, fire away. There are people here with the requisite knowledge


Been researching it for awhile and still kinda confused... help?

Capital markets - the market for buying and selling debt. read the Wikipedia page
Leveraged transactions - using borrowed money; for example, Ron Perelman in the 80s bought marvel comics for $80m, $10 cash, $70 by selling bonds that marvel would have to pay back (but didn't. Long story). Read the Wikipedia page for leveraged buyout
Mega buyout - a bullshit way of describing a leveraged buyout involving a massive firm

SportsFan
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Re: I am a stupid K-JD who doesnt understand Corporate law. Help

Postby SportsFan » Sat Aug 10, 2013 11:24 pm

Anonymous User wrote:these words "Business Reorganization & Financial Restructuring" make no sense to me :(

Do you have any sort of financial background? Seriously, just start with the basics on Wikipedia and keep reading as much as you can.

Anonymous User
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Re: I am a stupid K-JD who doesnt understand Corporate law. Help

Postby Anonymous User » Sat Aug 10, 2013 11:26 pm

SportsFan wrote:
Anonymous User wrote:these words "Business Reorganization & Financial Restructuring" make no sense to me :(

Do you have any sort of financial background? Seriously, just start with the basics on Wikipedia and keep reading as much as you can.


my financial background is extensive and fully includes introduction to macroeconomics and learning the Hands formula... literally thats the best i got :(

BeenDidThat
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Re: I am a stupid K-JD who doesnt understand Corporate law. Help

Postby BeenDidThat » Sat Aug 10, 2013 11:26 pm

Anonymous User wrote:these words "Business Reorganization & Financial Restructuring" make no sense to me :(


Biz reorg is a subset of bankruptcy, in which the financial obligations of a business are reorganized and the business continues on (or at least hopefully does) as a going concern.

And as others have said, I think you should go ahead and read up on wikipedia. Check out NYTimes Dealbook as well. The terms are thrown around enough that you should start to get a sense of what they mean by seeing them in use.

Just so you know: many people don't know what these terms mean before law school. It is a very learnable dialect.

Pokemon
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Re: I am a stupid K-JD who doesnt understand Corporate law. Help

Postby Pokemon » Sat Aug 10, 2013 11:27 pm

Anonymous User wrote:these words "Business Reorganization & Financial Restructuring" make no sense to me :(

They mean bankruptcy...

Anonymous User
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Re: I am a stupid K-JD who doesnt understand Corporate law. Help

Postby Anonymous User » Sat Aug 10, 2013 11:33 pm

BeenDidThat wrote:
Anonymous User wrote:these words "Business Reorganization & Financial Restructuring" make no sense to me :(


Biz reorg is a subset of bankruptcy, in which the financial obligations of a business are reorganized and the business continues on (or at least hopefully does) as a going concern.

And as others have said, I think you should go ahead and read up on wikipedia. Check out NYTimes Dealbook as well. The terms are thrown around enough that you should start to get a sense of what they mean by seeing them in use.

Just so you know: many people don't know what these terms mean before law school. It is a very learnable dialect.



How important is it to know this shit before interviews? Do interviewers even go into specifics discussing this stuff, or is a decently thought out answer to Corporate or Litigation enough?

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guano
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Re: I am a stupid K-JD who doesnt understand Corporate law. Help

Postby guano » Sat Aug 10, 2013 11:36 pm

Anonymous User wrote:these words "Business Reorganization & Financial Restructuring" make no sense to me :(

Lets say a company is worth $50 million, but has $100 million in debt, which it can't or won't pay back. For simplicity sake, lets call all shareholders A and divide bond holders into B and C, each accounting for half. A collectively owns 100% of the company.
Rather than go bankrupt, an agreement is reached.

A collectively owns 30%
B collectively owns 70%, and forgives all debt
C collectively takes a haircut on the debt, so now they're only owed $40m

Instead of A owning a worthless company they've basically given a chunk if ownership away but retain some leftovers.
Instead of B being owed more money than they can ever get from the company, they take up majority ownership, giving them a say in how the company will be run and a big chunk of the profit.
Instead of C being owed more money than they'll ever get back, they agree to accept a slight reduction in the value of the loan while significantly increasing the likelihood of getting it paid back

Everyone's a winner
Last edited by guano on Sat Aug 10, 2013 11:37 pm, edited 1 time in total.

Anonymous User
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Re: I am a stupid K-JD who doesnt understand Corporate law. Help

Postby Anonymous User » Sat Aug 10, 2013 11:36 pm

Anonymous User wrote:
BeenDidThat wrote:
Anonymous User wrote:these words "Business Reorganization & Financial Restructuring" make no sense to me :(


Biz reorg is a subset of bankruptcy, in which the financial obligations of a business are reorganized and the business continues on (or at least hopefully does) as a going concern.

And as others have said, I think you should go ahead and read up on wikipedia. Check out NYTimes Dealbook as well. The terms are thrown around enough that you should start to get a sense of what they mean by seeing them in use.

Just so you know: many people don't know what these terms mean before law school. It is a very learnable dialect.



How important is it to know this shit before interviews? Do interviewers even go into specifics discussing this stuff, or is a decently thought out answer to Corporate or Litigation enough?

I think it depends. Being a K-JD myself, I do have a bit of business experience (and a business major in college), and basically saying "I want to do transactional but not sure exactly which practice area" seemed to be a good enough answer for most. I know you mentioned Cahill, and the interviewer I had with them did grill me a bit on why I wanted to do corporate law.

dkb17xzx
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Re: I am a stupid K-JD who doesnt understand Corporate law. Help

Postby dkb17xzx » Sat Aug 10, 2013 11:37 pm

0L here...hth:

--LinkRemoved--

Edit: briefly explains capital markets

Anonymous User
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Re: I am a stupid K-JD who doesnt understand Corporate law. Help

Postby Anonymous User » Sat Aug 10, 2013 11:38 pm

Go to Chambers Associate and read the practice group descriptions.

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hephaestus
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Re: I am a stupid K-JD who doesnt understand Corporate law. Help

Postby hephaestus » Sat Aug 10, 2013 11:39 pm

Anonymous User wrote:Go to Chambers Associate and read the practice group descriptions.

Didn't mean to be anonymous. This was me.

Anonymous User
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Re: I am a stupid K-JD who doesnt understand Corporate law. Help

Postby Anonymous User » Sat Aug 10, 2013 11:42 pm

guano wrote:
Anonymous User wrote:these words "Business Reorganization & Financial Restructuring" make no sense to me :(

Lets say a company is worth $50 million, but has $100 million in debt, which it can't or won't pay back. For simplicity sake, lets call all shareholders A and divide bond holders into B and C, each accounting for half. A collectively owns 100% of the company.
Rather than go bankrupt, an agreement is reached.

A collectively owns 30%
B collectively owns 70%, and forgives all debt
C collectively takes a haircut on the debt, so now they're only owed $40m

Instead of A owning a worthless company they've basically given a chunk if ownership away but retain some leftovers.
Instead of B being owed more money than they can ever get from the company, they take up majority ownership, giving them a say in how the company will be run and a big chunk of the profit.
Instead of C being owed more money than they'll ever get back, they agree to accept a slight reduction in the value of the loan while significantly increasing the likelihood of getting it paid back

Everyone's a winner


and lawyers roles in this is what?

Anonymous User
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Re: I am a stupid K-JD who doesnt understand Corporate law. Help

Postby Anonymous User » Sat Aug 10, 2013 11:44 pm

ImNoScar wrote:
Anonymous User wrote:Go to Chambers Associate and read the practice group descriptions.

Didn't mean to be anonymous. This was me.


I prob have subpar reading comp skills but im still not entirely sure what lawyers roles are and why it takes so much god damn money and time and people for these things to happen

Anonymous User
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Re: I am a stupid K-JD who doesnt understand Corporate law. Help

Postby Anonymous User » Sat Aug 10, 2013 11:44 pm

Anonymous User wrote:
guano wrote:
Anonymous User wrote:these words "Business Reorganization & Financial Restructuring" make no sense to me :(

Lets say a company is worth $50 million, but has $100 million in debt, which it can't or won't pay back. For simplicity sake, lets call all shareholders A and divide bond holders into B and C, each accounting for half. A collectively owns 100% of the company.
Rather than go bankrupt, an agreement is reached.

A collectively owns 30%
B collectively owns 70%, and forgives all debt
C collectively takes a haircut on the debt, so now they're only owed $40m

Instead of A owning a worthless company they've basically given a chunk if ownership away but retain some leftovers.
Instead of B being owed more money than they can ever get from the company, they take up majority ownership, giving them a say in how the company will be run and a big chunk of the profit.
Instead of C being owed more money than they'll ever get back, they agree to accept a slight reduction in the value of the loan while significantly increasing the likelihood of getting it paid back

Everyone's a winner


and lawyers roles in this is what?

All the parts that were cut out to make this seem simple.

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guano
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Re: I am a stupid K-JD who doesnt understand Corporate law. Help

Postby guano » Sat Aug 10, 2013 11:53 pm

Anonymous User wrote:
Anonymous User wrote:
guano wrote:
Anonymous User wrote:these words "Business Reorganization & Financial Restructuring" make no sense to me :(

Lets say a company is worth $50 million, but has $100 million in debt, which it can't or won't pay back. For simplicity sake, lets call all shareholders A and divide bond holders into B and C, each accounting for half. A collectively owns 100% of the company.
Rather than go bankrupt, an agreement is reached.

A collectively owns 30%
B collectively owns 70%, and forgives all debt
C collectively takes a haircut on the debt, so now they're only owed $40m

Instead of A owning a worthless company they've basically given a chunk if ownership away but retain some leftovers.
Instead of B being owed more money than they can ever get from the company, they take up majority ownership, giving them a say in how the company will be run and a big chunk of the profit.
Instead of C being owed more money than they'll ever get back, they agree to accept a slight reduction in the value of the loan while significantly increasing the likelihood of getting it paid back

Everyone's a winner


and lawyers roles in this is what?

All the parts that were cut out to make this seem simple.

This. Everything from negotiating the new structure to drafting the documents, to convincing all parties to get on board to dealing with holdouts to making sure the deal gets done.

Anonymous User
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Re: I am a stupid K-JD who doesnt understand Corporate law. Help

Postby Anonymous User » Sun Aug 11, 2013 12:10 am

thanks!

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guano
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Re: I am a stupid K-JD who doesnt understand Corporate law. Help

Postby guano » Sun Aug 11, 2013 12:13 am

Anonymous User wrote:thanks!

You're welcome

BeachedBrit
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Re: I am a stupid K-JD who doesnt understand Corporate law. Help

Postby BeachedBrit » Sun Aug 11, 2013 11:13 am

Anonymous User wrote:What exactly is "Capital MArkets"? leveraged loan transactions? Mega-buyouts? I am trying to understand what firms like Cahill do. I understand the litigation side and kind of the M&A side but clueless as to many other aspects. About to go on some interviews (rising 2L) so all help is appreciated

Capital Markets (also often referred to as "Cap-M") is basically just raising money for companies. I'm going to give an oversimplified explanation that's not entirely accurate because of simplification.

Lets say that General Electric wants to build a nuclear power plant (~$5 billion in the US iirc). They may have the cash on hand already but it's probably not an efficient use of the money given current interest rates etc. So they have a few options: they can borrow the money from a bank (traditional loan) where they may or may not pledge other assets as security on that debt; alternately (and this is where Capital Markets really comes in) they can raise money by issuing bonds (basically selling debt to outside investors, either public or private) or they can sell shares in either the entire company or in another company that was created for the sole purpose of ownership of that project. Any of these options will allow them to raise money (aka "capital") through the various mechanisms (aka "market") which will allow them to build the project. Now, keep in mind that many of these transactions aren't for the purpose of building a specific project (project finance groups handle that mostly), but for raising money for the company to continue business, expand into a new business, buy another company or group, or pay down debt that has a higher cost/interest rate than the capital they are seeking to raise.

One interesting note is that some Capital Markets work may slow down soon. As interest rates rise (which the fed has signalled they will soon), it becomes more expensive to raise money and so a variety of things that were previously feasible because of the low time-cost of the money, are no longer feasible. The upside is that right now, when it's clear rates will rise soon, is when a lot of people try to raise as much money as possible.

law321
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Re: I am a stupid K-JD who doesnt understand Corporate law. Help

Postby law321 » Sun Aug 11, 2013 11:25 am

Anonymous User wrote:
BeenDidThat wrote:
Anonymous User wrote:these words "Business Reorganization & Financial Restructuring" make no sense to me :(


Biz reorg is a subset of bankruptcy, in which the financial obligations of a business are reorganized and the business continues on (or at least hopefully does) as a going concern.

And as others have said, I think you should go ahead and read up on wikipedia. Check out NYTimes Dealbook as well. The terms are thrown around enough that you should start to get a sense of what they mean by seeing them in use.

Just so you know: many people don't know what these terms mean before law school. It is a very learnable dialect.



How important is it to know this shit before interviews? Do interviewers even go into specifics discussing this stuff, or is a decently thought out answer to Corporate or Litigation enough?



You are not expected to know this stuff inside and out. But if you indicate you want corporate, and I ask why, you should have an intelligent response, which will require some basic knowledge of the legal/business concepts relevant to the practice area of interest.

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guano
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Re: I am a stupid K-JD who doesnt understand Corporate law. Help

Postby guano » Sun Aug 11, 2013 12:27 pm

BeachedBrit wrote:
Anonymous User wrote:What exactly is "Capital MArkets"? leveraged loan transactions? Mega-buyouts? I am trying to understand what firms like Cahill do. I understand the litigation side and kind of the M&A side but clueless as to many other aspects. About to go on some interviews (rising 2L) so all help is appreciated

Capital Markets (also often referred to as "Cap-M") is basically just raising money for companies. I'm going to give an oversimplified explanation that's not entirely accurate because of simplification.

Lets say that General Electric wants to build a nuclear power plant (~$5 billion in the US iirc). They may have the cash on hand already but it's probably not an efficient use of the money given current interest rates etc. So they have a few options: they can borrow the money from a bank (traditional loan) where they may or may not pledge other assets as security on that debt; alternately (and this is where Capital Markets really comes in) they can raise money by issuing bonds (basically selling debt to outside investors, either public or private) or they can sell shares in either the entire company or in another company that was created for the sole purpose of ownership of that project. Any of these options will allow them to raise money (aka "capital") through the various mechanisms (aka "market") which will allow them to build the project. Now, keep in mind that many of these transactions aren't for the purpose of building a specific project (project finance groups handle that mostly), but for raising money for the company to continue business, expand into a new business, buy another company or group, or pay down debt that has a higher cost/interest rate than the capital they are seeking to raise.

One interesting note is that some Capital Markets work may slow down soon. As interest rates rise (which the fed has signalled they will soon), it becomes more expensive to raise money and so a variety of things that were previously feasible because of the low time-cost of the money, are no longer feasible. The upside is that right now, when it's clear rates will rise soon, is when a lot of people try to raise as much money as possible.

The flop side to rising interest rates is that it's usually accompanied by greater returns overall, so there's more opportunities for investing (this has more caveats than I care to write)




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