What is Bring-Down Letter?
The Short Answer
Bring-Down Letter explained simply
A Bring-Down Letter is a formal document used in legal and financial deals. It confirms that statements or facts certified at an earlier date are still true and correct on a later, specified date. This letter is often required before closing a deal to ensure that no material changes have occurred since the initial certifications were made. It helps reduce risk for all parties involved by providing an updated assurance of the information.
Real-World Example
The Acquisition Agreement
Imagine a company, "Tech Solutions," is buying "Innovate Corp." During due diligence, Innovate Corp. provides a certificate stating all its contracts are valid. A month later, just before closing the deal, Tech Solutions asks for a Bring-Down Letter. This letter from Innovate Corp. confirms that all contracts are still valid and no new issues have arisen since the initial certification. This saves Tech Solutions from having to re-verify every contract again.
Why this matters
Bring-Down Letters are important because they provide an updated assurance of facts without needing a full re-certification. This saves time and money in complex transactions. It also helps protect buyers by confirming that the information they relied on during due diligence is still accurate at the time of closing.
Always ask for a Bring-Down Letter if there's a gap between your initial due diligence and the closing date. It's a simple way to protect yourself from unexpected changes.
Always ask for a Bring-Down Letter if there's a gap between your initial due diligence and the closing date. It's a simple way to protect yourself from unexpected changes.
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