R. Shermer & Company
When Chosing A Trustee or Monitor...
There are a number of selection criteria usually considered...

INDEPENDENCE - In order to be considered for this role, the Trustee or Monitor must be viewed as independent.  If there is a current or prior legal, audit, tax, or consulting relationship, there may be perceptions concerning a possible conflict of interest

RESPONSIVENESS - Ability to access the right resources to expeditiously address any concerns, questions or issues before they unnecessarily escalate

EXPERIENCE - Recent relevant work experience with a proven trustee or monitoring process in place

INDUSTRY BACKGROUND - Knowledge of the specific industry involved in the transaction

R. Shermer & Company's White Paper "Intellectual Property" discusses a number of the factors critical to the protection of IP during a divestiture or acquisition. If you would like to view a copy, please click on the document.

Based On Our Experience, We Feel...
It is imperative that the Trustee or Monitor be engaged prior to the merger date...

1. The Trustee or Monitor needs to be ready on “day one” to be a buffer between all the Parties involved in the transaction

2. A preliminary assessment of the business and support systems will minimize any disruptions that may occur

3. A well-orchestrated communication plan is critical. The plan must cover both the impacted business and the unaffected pieces of the merged entity

4. Define the role of the Trustee or Monitor to be consistent with what it can reasonably be expected to perform, with the authority given

5. The Human Resources issues associated with the employees of the divested assets will impact the performance of the assets and their immediate success once divested

6. Processes need to be established in order to address “non-major” violations of the Order

7. When establishing a Held Separate Business, there is a need to complete an assessment of all aspects of the unit being divested and establish performance baselines early-on. These activities normally include:
  • Assess systems interaction and access to confidential information
  • Identify all personnel and key supply chain partners
  • Map all support services
  • Assess and/or develop monitoring metrics
  • Ensure that HSB management makes communication a priority

One Final Thought...

“With the combination of their technical knowledge and their unrestricted access, they can resolve disagreements between the respondent and the buyer….The auditor trustee creates a basis for trust between parties that do not have a community of interest.”

Study of the Commission’s Divestiture Process
Bureau of Competition of the Federal Trade Commission, 1999