Behind The Perfection Certificate (Part I): The Share Purchase Transaction Certification

Over the next few weeks, we will go in depth into a few certifications contained in most perfection certificates in the context of a post-M&A or leveraged finance acquisition debtor.

A perfection certificate is the first step in any secured lending transaction and a time consuming task for debtors (and their counsel) to complete. Lenders and their counsel rely on the information contained in a perfection certificate to determine what steps they need to take in order to perfect (i.e., render effective against third parties) a creditor's security interest and whether there are any pre-existing creditors that need to be dealt with. The perfection certificate also serves as a good starting point for the disclosure that a debtor is typically required to provide to creditors in the governing credit and security documentation.