Book of Jargon® Series
The Book of Jargon® Series
Business Model Innovation
the act of accumulating long-term value by delivering services to customers in a new, more efficient manner. In response to technological changes, a firm may have to revamp the entire business model to remain competitive.
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Loss Payee
the person or persons to whom a property insurance company writes a check for proceeds of a claim. Secured Lenders want to be named a Loss Payee because the damaged or destroyed property is the Collateral securing the Lenders’ loan, so they want to ensure that any proceeds received in respect of such Collateral are used to either purchase replacement Collateral or repay debt.
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Financial Covenants
provisions in a loan agreement according to which the Borrower is obligated to maintain or fulfill specific financial target settings during the duration of the loan
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Roughneck
a colloquial term for a member of the drilling crew that assists with daily operations and maintenance on the Drilling Rig. Also the frontrunner name submission in the event Midland, Texas ever gets an NFL team.
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Scheme of Arrangement
An English statutory procedure involving a compromise or arrangement between a company and a Class of its Creditors or members, with the sanction of a court. To gain the sanction of the court, the Scheme of Arrangement must be fair and reasonable and must be a genuine attempt to reach an arrangement or compromise between the company and its Creditors and/or members. Approval requires 75 per cent by value of votes cast and a majority by number. A helpful tool in restructuring, allowing a Cramdown to be implemented on Creditors within the same Class without the company having to commence full scale Insolvency proceedings such as Administration. Can also be used in order to effect a public to private/takeover in the UK by either the cancellation of all existing shares upon payment of consideration to the target shareholders and the issuance of new shares to the bidco (a ‘cancellation scheme’) or by the transfer of all existing shares to the bidco (a ‘transfer scheme’). In Ireland, a statutory Scheme of Arrangement is available for Irish-registered companies and in certain circumstances may apply to foreign registered companies. Approval requires at least 75 per cent in value of the Creditors and a majority by number of each class of Creditors, which is a significantly higher approval threshold than that required for a scheme of arrangement in Examination. Examination also offers an Automatic Stay and restrains actions against the company, so statutory Schemes of Arrangement in Ireland are rarely used.
Word of the Day®
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The Book of Jargon® – Real Estate & REITs
Latham's digital glossary defines and demystifies more than 1,000 industry terms.