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Course Details

This CLE webinar will provide practitioners with a comprehensive overview of risk allocation in real estate and infrastructure transactions, including through traditional indemnities, representations and warranties insurance (RWI), and tax insurance. The panel will describe the principal risks, including applicable tax issues, specific to real estate and infrastructure transactions, while comparing traditional indemnities with transactional risk insurance.

Faculty

Description

The parties to real estate and infrastructure transactions are tasked with apportioning often complex risks amongst themselves. Our expert panel will discuss the various risks involved in these transactions, with a focus on tax-related risks, as well as traditional indemnity structures.

RWI and tax insurance, once primarily used in M&A transactions, are increasingly used in real estate and infrastructure transactions, especially in complex transactions. RWI protects parties against financial losses arising from inaccuracies made in the seller's representations and warranties in the purchase agreement where traditional methods of risk allocation and risk management may not be sufficient for complex transactions. A related product, tax insurance, can protect against specific, identified tax risks, such as failure to comply with REIT requirements or uncertainties relating to the tax credits introduced by the Inflation Reduction Act.

Counsel should understand for which transactions they should recommend transactional risk insurance to their clients and be aware of the pros and cons for buyers and sellers. Counsel should also understand how RWI or tax insurance may impact the due diligence process and how to ensure the purchase agreement and insurance policy align with the parties' expectations.

Listen as our expert panel provides a comprehensive overview of transactional risk insurance, including when transactional risk insurance should be considered for a transaction and the risks and benefits of insurance for all parties.

Outline

  1. Overview of the principal risks in real estate and infrastructure transactions
    • Complexity inherent in transactions involving private equity funds and related investment structures
    • International and cross-border transactions
    • Minority investments and co-investments
    • Tax-specific risks
      • REITs
      • Renewable tax credits
      • Fund-level risks
  2. Traditional risk allocation in real estate and infrastructure transactions
  3. Advantages of transactional risk insurance products
  4. Best practices when negotiating coverage and exclusions
  5. Disputes
    • Recoveries under a traditional indemnity structure
    • Insurance recoveries under RWI and tax insurance policies
  6. Practitioner takeaways

Benefits

The panel will review these and other important issues:

  • For which real estate and infrastructure transactions should counsel encourage their clients to purchase RWI or tax insurance?
  • What are the benefits of transactional risk insurance for sellers? Buyers?
  • What are the risks of transactional risk insurance for sellers? Buyers?
  • What are the best practices for negotiation of coverage and exclusions in RWI policies and tax insurance policies?