Once executives have closed a major deal — a merger that will create one dynamic company from two — the details are handed to the legal team with one directive: make it happen.
Before a transaction is finalized, however, it may have to survive review by the Department of Justice or Federal Trade Commission under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976. The HSR Act requires that prior to certain mergers and acquisitions, the parties must notify these government agencies of the proposed merger, tender offer, or other acquisition by filing a Notification and Report Form. If the government agency decides further investigation is warranted after reviewing the form, it will submit a “Second Request” for the entities to gather documents and information relating to the proposed transaction.
The main difference between a Second Request and a typical discovery request is timing: Second Requests require parties to produce a laundry list of voluminous data, including categories of information such as sales, marketing, assets, facilities, and business structure, within a very compressed time frame. Given the number of custodians potentially involved and the ever-increasing amount of electronically stored information to be collected, analyzed, culled and produced, the process can be overwhelming. The volume of data involved and the short window given to comply, coupled with intense pressure to be accurate given the potential stark consequences of noncompliance — penalties or a broken deal — make mounting a response to the Second Request especially challenging.
Having the right tools and best practices available can help you successfully manage a Second Request. Here are some practical steps to be taken when faced with a Second Request:
1. Assemble a response team. A Second Request creates a significant workload that can disrupt a business. With a lucrative deal at stake, it is imperative to form a team of motivated individuals who are capable of communicating effectively and directly. When problems arise, it’s important to have open communication lines already established between parts of the organization that typically may not communicate: be sure to include representatives from various departments, including IT.
It is important to assemble this team early on in the process so that they are aware of developments and have some working knowledge and history of working together as a team.
2. Prepare and plan. Begin preparing for a Second Request early — during the waiting period while the government reviews your Notification and Report Form, if not before. Identify custodians with potentially responsive data and map the locations where your organization’s data is housed. Assess any issues or challenges involved in gathering data and start working on plans to address these, which may include engaging outside parties, getting pricing, etc.
3. Designate a committed project manager. Streamline the process by employing a dedicated project manager to oversee the Second Request. A project manager will define critical steps and junctures, oversee the workflow and anticipate problems before they arise. Consider bringing on the expertise of a third-party discovery provider to help manage the process.
4. Utilize advanced review tools, such as technology-assisted review. Culling through a treasure trove of information in a short span of time is a daunting task — particularly when a deal is on the line. Tools such as keyword search, de-duplication, clustering, e-mail threading, and technology-assisted review can expedite the review of large amounts of information. In fact, when used properly, technology-assisted review can accelerate the review process by up to 70 percent: it allows you to focus on key documents while de-prioritizing those that are likely non-relevant, saving time and reducing costs.
Responding to a Second Request requires advance preparation and strong communication among a well-assembled and directed team using state-of-the-art technology. By putting this formula for success into action, your legal team can meet expectations and maximize the chances of a successful and timely Second Request review.
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