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Arranger liability: Behave yourself

Banks' disclaimers on debt deals will be ineffective if their behaviour doesn't match up. An analysis from the legal perspective.

(This article appears courtesy of International Financial Law Review, sign up for a free trial on their site

(Go directly to IFLR'S commentary)

The High Court of England and Wales recently handed down its decision in IFE Fund SA v Goldman Sachs International, which examined the conduct of Goldman Sachs International as the arranger and underwriter of the issue of bonds in the European mezzanine debt market.

In particular, the IFE case ruled on Goldman Sachs' liability arising from its dissemination of an information memorandum, including certain accounting reports, to a participant in conjunction with the syndication of mezzanine bonds, and Goldman Sachs' ability to limit its liability by relying on customary disclaimers of responsibility incorporated within the information memorandum.

The IFE case is significant for two reasons. First, it is rare that the conduct of an arranger in its customary role of marketing a debt package is litigated to judgment. Secondly, the IFE case purposefully examines and provides insight as to the Court's assessment of the customary role and associated liability of an arranger that disseminates information memoranda to participants as part of the syndication process.


Autodis, a French company, mandated Goldman Sachs to underwrite a €275 million mezzanine facility to partially fund its acquisition of Finelist Group, an English public company.

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