The Basics Of Closing - Who should attend a closing?

Each person responsible for signing a document at the closing should expect to be present at the closing offices, or to be otherwise available, from the time that the closing is scheduled to the time of actual signing. If the signatory officer is also the businessperson responsible for the transaction, he or she is likely to be engaged throughout the preclosing and closing process.

If, on the other hand, the individual with signing authority is not otherwise involved in the transaction, he or she should be willing and able to remain available in the event that there is a delay in the closing process. Each individual sharing responsibility for the transaction should be on hand to review documents and participate in the negotiation of any final changes.

Attorneys for each of the parties to the transaction will typically be required to participate in final negotiations and preparation and review of the closing documents, including, if required, opinions of counsel as to certain matters such as expected tax effects of the deal. The attorneys will also typically coordinate a bring-down letter, which promises that all of the representations and warranties from the signing date are still true and correct as of the closing date.

The participation of parties at other locations may also be required, depending on the nature of the transaction. For example, a transaction involving the transfer of assets (rather than stock) will typically require that certain conveyance documents be recorded at the time of closing at the appropriate federal, state, or local recordation offices in the jurisdiction where those assets are located. Likewise, multistate acquisitions involving real and personal property may require filings in numerous locations. Further, counsel from each of those jurisdictions may have to render an opinion as to the effectiveness of the conveyances as a condition to closing.

If the transaction involves one or more mergers, attorneys or other appropriate persons will have to file merger certificates and other documents at the offices of the secretary of state of each jurisdiction where filing is required to effect those mergers. Finally, if the conveyed assets constitute security for the financing of the transaction, then the security documentation (such as a mortgage, in the case of real estate) will also be recorded, and opinions of local counsel will be given in connection to these. The effective coordination of all of these off-site events is one of the more significant organizational challenges of a transactional closing.