Joint Venture Agreements – an update on ours

A few months ago I wrote about our experience to date with joint venture agreements.  In addition to providing a brief background on joint venture agreements, and in particular the differences between joint venture agreements and, say,  strategic alliance agreements, and then I discussed the joint venture agreement that we had entered into with a technology partner.

The basis for the joint venture was that they had spent years building and refining a technology to find and download court filings from federal district courts from across the country, so that lawyers, professionals, and the general public could search across all the federal district courts to research every federal civil case to find out if specific companies or individuals had been involved in litigation.  This is very complementary to another product of ours for civil litigators, called www.SmartRules.com.

We have a lot more depth when it comes to understanding the attorney market, based on our other products, including www.RealPractice.com and www.RealDealDocs.com, which provides searchable access to millions of agreements and contracts, as well as agreement clause search.

In any event, enough background.  How are we doing today?

Well, we anticipated a soft product launch by the beginning of October, and it looks like we’re about 45 days behind schedule.  Lessons learned so far:

1. The success of the joint venture needs to be somebody’s job for things to get done on time.  Seems obvious, actually, but each of the joint venture partners needs to be fully engaged for success.  We’ve each consciously made prioritization decisions, and our respective day jobs have pushed the product launch back a bit.
2. Make sure the roles are clearly defined.  We’ve done a good job here for the work that has been done.
3. Reiterate and highlight the goals to be achieved.  This helps with the prioritization of the project, and in part goes back to #1 above.

We’re still encouraged by the opportunity, and we’re looking forward to introducing you to www.CourtCasesOnline.com shortly!

Bank bailout bill fails, Dow takes big hit

Come on guys, let’s get this one figured out.  The House of Representatives just failed to pass the bailout plan (with a hard cost of $350 billion authorized, not the $700 billion everyone is talking about), and the bottom dropped out of the Dow, although it is starting to recover.

Nobody’s happy about this massive bailout package, just like nobody’s happy about having to put in an insurance claim on a car wreck and take the hit on their insurance premiums.  But a massive liquidation of the banking sector will have enormous ramifications on the economy for a long time to come, and in spite of all the furious calls to congressional representatives, I don’t think Main Street has digested this yet.

I’m not sure if it was any one element of the proposed bill that resulted in its failure, or just the collective disgust with this big mess that we’re on, but it seems that it’s a matter of days, not weeks, for some more of these major banks to collapse due to their inability to recapitalize, not to mention the potential for foreign investors to abandon the US market, driving the cost of financing our massive spending binges by individuals and the federal government through the roof.

Citibank takes out Wachovia in an asset purchase agreement

In what has truly become a Darwinian process of survival of the fittest, or at least the barely standing,  Citibank won a bidding war with Wells Fargo and is acquiring Wachovia Bank in an all stock asset purchase agreement (links to sample asset purchase agreements here, as the actual transaction hasn’t been publicly filed yet). 

For only $2.2 billion in stock, Citigroup is acquiring Wachovia’s enormous deposit network, $300 billion worth of Wachovia’s loan portfolio and about $53 billion in Wachovia debt.  As part of a separate arrangement with the Federal Deposit Insurance Corporation, the FDIC will be responsible for anything in excess of $42 billion in losses on that loan portfolio.

Portions of Wachovia will remain independent and publicly traded, such as its brokerage business, which acquired A.G. Edwards last year for $6.7 billion, and its Evergreen investment management division, which has nearly $250 billion in assets under management.

Citigroup and some of the other large surviving banks, such as Bank of America and JPMorgan Chase, are clearly making very aggressive moves to buy market share for bargain basement promises.  Along the way, they are needing to recapitalize as well to cover losses in their own portfolios as well as their newly acquired businesses.  To help finance the asset purchases, Citigroup is raising $10 billion through a sale of common stock, slashed its dividend, and it has been working to divest itself of some $400 billion in assets in a move to reorganize and focus on what it sees to be its core growth opportunities.  Lots of operating and financial risk there, if you ask me.