CRAFTY LEARNS

Managing risk

Financial stress, turnarounds, mass claims, & how the in-house lawyer can be a level-headed hero

Facilitated by Dentons:

  • Susan Moore, Partner (susan.moore@dentons.com)
  • Luci Mitchell-Fry, Partner (luci.mitchell-fry@dentons.com)
  • Darren Acres, Partner (darren.acres@dentons.com)

1. Dealing with supply chain disruption

Monitor, manage, mitigate:

  • Cost-benefit analysis of alternative supply options
  • Is your ongoing support required? Will this improve your position long term?
  • Information is power so identify warning signs with news alerts and use commercial leverage
  • Does the counterparty have a rescue plan, and is it feasible?

Check the small print

  • Assess reputational and financial risk of terminate, and any duties surviving termination
  • Can you improve your contractual terms to protect against future risk?
  • Review all insurance contracts
  • Establish ownership of critical IP, knowhow, equipment

Prepare for the worst:

  • Consider commercial opportunities and threats to your business
  • Take advice on your rights in any insolvency
  • Conduct regular insolvency searches against your counterparty
  • Put the account of your counterparty on hold immediately upon insolvency

2. Advising the Board of their duties

3. Redress schemes: strategy for the GC toolkit

Benefits
Analysis for considering a redress scheme
Highly flexible for mass claims / regulatory redress
Assess potential claims and insurance coverage
One efficient channel of claims handling and adjudication
Evaluate pros and cons against other strategies
Common quantification criteria - binding on all
Address affordability considerations
Clear endpoint via bar date to provide finality
Consider liabilities of third parties - for contribution
Proactive reputation management; retains control
Consider product recall and protection for related businesses
Can avoid widespread litigation / regulator action
Consider PR implications and potential cost savings

If you want to learn more about this topic, here are some additional resources:

  • Reach out the the Dentons team for more support

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