Paul Sutton
Paul Sutton is the founder of LCN Legal, a law firm which specialises in corporate and property investment structures. He was previously a corporate partner in the London offices of Pinsent Masons and McGrigors, and was a director in KPMG’s UK law firm.
Paul has contributed articles to various other publications, such as Financial Director Magazine, PLC Magazine, Practical European Tax Strategies, International Accountant, Tax Journal, Estates Review and Butterworths Journal of International Banking & Financial Law. He has presented training sessions to major accounting firms, multinational corporates, banks and owner-managed businesses on a range of corporate law issues.
1 Contributions by Paul Sutton
PRACTICE NOTES
UK property SPV share acquisitions: legal risk allocation, due diligence, heads of terms, NAV/completion accounts pricing, and practical completion mechanics compared with direct property purchases
Key differences in the legal risk profile, compared to a direct property purchase
In general, a person acquiring the shares in an SPV that owns UK property seeks to emulate the commercial position that would exist on a direct purchase of that property. Typically, property-related points are handled through replies to enquiries and the buyer’s own investigations, with any other issues dealt with separately via due diligence and the corporate documentation. Nevertheless, the risk profile of an SPV transaction is, unavoidably, quite different from that of buying the property directly. Two principal reasons explain this:
on a direct purchase, the buyer can rely directly on property searches and the process of land registration to secure good title to the property, free of encumbrances. In an SPV share acquisition, those searches provide only indirect protection
the purchaser of SPV shares will inherit, albeit indirectly, any actual or contingent liabilities and issues relating to the corporate entity itself. To assess those liabilities, the buyer must rely on information provided by the seller...
Property
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