Cross-Border Public Listing custom essay

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Examination: The examination will be administered on a take home basis. The examination is based
on the course work. However, you are encouraged to undertake further research. The maximum total
limit on answers (excluding footnotes) is 4000 words. You have June 15 2012 to complete the take
home from the day after the last day of class.
Fact Pattern: You are an associate in a Houston law firm. Your firm acts for a number of experienced
property developers in Texas. One of these firms is called, “Pacrim Properties” (PP). PP holds cash in
bank of USD500 million and other assets. Amongst its other assets is a world-wide patent for a
construction system that has not been licensed into Australia or New Zealand.
PP has undertaken market research on the property market in Australia and New Zealand. It has
discovered that a number of wealthy USA citizens are investing in residential property in the South
Island of New Zealand near the summer and winter resort of Queenstown. It has also discovered that
there is USA demand for residential properties in Queensland, Australia, where prices for beachfront
property are much lower than in the USA. PP has decided to enter these markets by buying land and
building residential properties for sale or lease.
PP wants to incorporate one company in Australia and one company in New Zealand to hold its
property acquisitions. PP seeks your law firm’s advice and specifically requests that you blend
“commercial” advice with your legal advice.
The request for advice has come to a partner in the firm. The partner has asked that you do the
preliminary work on the file.
Question One (15 marks): Can you advise PP direct on foreign law? If not, why not? What is the
proper course of action? Write a short internal memo to partner on this point. Suggested length of
answer: 2 pages.
Question Two (35 marks): Write a brief internal memo to partner on the following matters: (1) the
preferred type of company to use; (2) the incorporation process including the decision on mode of
shareholding; (3) the significance or otherwise internal governance rules of each company bearing in
mind the commercial realities; (4) the appointment of directors, and, (5) the initial capitalisation of each
company as regards the debt/equity split and thin capitalisation. Suggested length of answer: 5-6
Question Three (total of 50 marks): Time passes. You are now a senior associate in the same Houston
law firm. PP’s property acquisitions and construction projects in Australia and New Zealand have
proved a success.
Assume a combined balance sheet of the Australian and New Zealand companies that shows
AUD25m equity and AUD75m debt against assets (land and real property) of AUD200 million. The
assets are supported by registered valuations. Assume also that the real estate assets can support an
annual cash flow of at least AUD25m. No IP appears on the books of either company at present
although note that the construction of properties in Australia and Zealand employed the IP of the parent
company. A “trade sale” is a possibility. Discuss the advantages of a trade sale as opposed to a listing. Discuss
the overseas Chinese business networks in your answer. (25 of the 50 marks). Suggested length of
answer: 3-5 pages.
In the event, the directors of PP decide that it is now a good time to list their companies and raise
further capital while retaining control of the newly listed entities. PP now contemplates listing the two
companies in Australia and New Zealand or in one of these countries pursuant to the mutual
recognition regime. Ideally, PP seeks to recoup expenditures of AUD100m and obtain a control block
of shares in the listed entity. Advise PP on structuring the transaction and listing (25 of the 50 marks).
Suggested length of answer: 5-7 pages.
Note: The maximum length of your answer should be 20 A4 pages at 250 words per page (5000
words). You should be able to cover all matters in about 15 pages.
A note on terminology: the laws we are examining all flow from England. England later became part of
Great B
1: Hanrahan, Ramsay and Stapledon, Commercial Applications of Company
Law, 13
ed. (CCH Australia, 2012). Hereafter, “CACL”. ISBN 978-1-
2: Walker, Reid et al, Commercial Applications of Company Law in New
Zealand, 4th ed. (CCH New Zealand, 2012). Hereafter, “CACLNZ”.
3: materials following

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