Investing glossary

The Absolute Priority Rule is the Chapter 11 principle reflected in Bankruptcy Code Section 1129(b) that, in specified cramdown circumstances, prevents a…

**Accounts payable** are amounts owed to suppliers for goods or services a company has received but has not yet paid for. They are generally current…

**Accounts receivable** are amounts owed by customers for goods or services a company has already provided but has not yet collected in cash. Companies usually…

An investor who meets SEC income or net worth thresholds and may access private offerings.

Accrued expenses are costs a company has incurred but has not yet paid in cash. They are generally recorded as liabilities so expense recognition follows the…

Accumulated other comprehensive income is the cumulative equity balance of specified gains and losses recognized in other comprehensive income rather than…

An add-on acquisition is a company purchased by an existing portfolio company—often a platform company—to expand scale, geography, products, customers…

Additional paid-in capital is an equity account that generally records amounts contributed above a share’s par value plus certain other equity-related…

Adequate Information is the Section 1125 disclosure standard requiring enough reasonably practicable information about the debtor and proposed Chapter 11 plan…

Adequate Protection is bankruptcy protection provided to preserve a creditor's interest in property when the automatic stay, use of collateral, sale of…

An Administrative Expense Claim is a bankruptcy claim for an expense allowed under Bankruptcy Code Section 503, commonly arising from specified postpetition…

An Allowed Claim is a bankruptcy claim that has been recognized as allowable under the Bankruptcy Code, a confirmed plan or a court order, rather than…

An amend-and-extend transaction is a financing in which a borrower amends an existing credit facility and extends the maturity of participating loans or…

**Amortization** is the systematic allocation of the cost of a finite-lived intangible asset over its estimated useful life. It is conceptually similar to…

An asset class is a broad group of investments with similar economic characteristics. Common frameworks include stocks, bonds and cash, with broader…

Assumption and Assignment is the Bankruptcy Code Section 365 process through which a debtor first assumes an executory contract or unexpired lease and then…

An at-the-market offering lets a public company sell newly issued shares into the existing market from time to time through a sales agent.

Authorized shares are the maximum number of shares a corporation is permitted to issue under its charter or comparable governing document unless amended.

An Automatic Shelf Registration Statement is a Form S-3, Form F-3 or eligible Form N-2 shelf Registration Statement filed by a Well-Known Seasoned Issuer under…

The Automatic Stay is the statutory injunction under Bankruptcy Code Section 362 that generally arises upon a bankruptcy filing and halts specified lawsuits…

An Available Amount Basket is a cumulative covenant basket that can permit investments, restricted payments or junior-debt payments using capacity generated…

An Avoidance Action is a bankruptcy cause of action that uses statutory avoiding powers to invalidate specified transfers, obligations, liens or transactions…

Backstop Allocation is the portion of a restructuring financing assigned to Backstop Parties after ordinary subscriptions, oversubscription and other offering…

A Backstop Commitment is a contractual undertaking by one or more investors to purchase securities or interests not subscribed for by eligible participants in…

A Backstop Fee is consideration paid or issued to investors for committing capital and assuming the risk that they may be required to purchase unsubscribed…

A Backstop Party is an investor that enters into a Backstop Commitment to purchase unsubscribed securities or interests in a restructuring financing, subject…

Bad actor disqualification is a securities-law restriction that can prevent an offering from relying on certain exemptions when specified covered persons have…

A Balloting Agent is a bankruptcy service provider authorized to distribute or process Chapter 11 plan ballots, apply court-approved tabulation procedures and…

Bankruptcy Conversion is the process of changing an existing bankruptcy case from one chapter of the Bankruptcy Code to another chapter when the Code permits…

A Bankruptcy Discharge in Chapter 11 is the statutory release of qualifying debtor obligations that arises through confirmation as provided by Bankruptcy Code…

Bankruptcy Dismissal is the termination of a bankruptcy case by court order or statutory procedure before the case reaches the ordinary closing process…

A bankruptcy estate is the legal estate created when a bankruptcy case begins, generally including the debtor’s legal and equitable interests in property as of…

A Bankruptcy Examiner is a disinterested person appointed in a Chapter 11 case to investigate specified matters concerning the debtor without taking over the…

A Basic Subscription Right is the primary entitlement granted in a rights offering that allows an eligible holder to purchase a stated amount of new securities…

A Beneficial Holder is the investor with the economic interest in a security or claim that is registered or held through a broker, bank, custodian, nominee or…

A Beneficial Ownership Limitation is a contractual cap that restricts conversion or exercise of a security to the extent the transaction would cause the…

A best efforts offering is a securities distribution in which an intermediary agrees to use specified efforts to place securities with investors without…

The Best Interests of Creditors Test is the Chapter 11 confirmation requirement under Section 1129(a)(7) that protects each nonaccepting holder of an impaired…

Blue sky laws are state securities statutes and regulations governing securities offerings, sales, intermediaries and anti-fraud enforcement within each state.

Board Designation Rights are contractual or security-based governance rights allowing an investor or investor group to designate, nominate or require…

Board Observer Rights are contractual rights allowing a designated investor representative to attend specified board or committee meetings and often receive…

Book value per share measures accounting common equity on a per-share basis, commonly using common shareholders’ equity divided by common shares outstanding.

Bookbuilding is the process of collecting investor indications of interest, including desired quantities and prices, to help an issuer and its underwriters…

A bookrunner is an underwriter that manages the order book of investor indications of interest during a securities offering and helps coordinate information…

A bridge loan is temporary debt financing designed to fund a transaction or liquidity need until the borrower completes a planned longer-term financing, asset…

A bring-down condition is a closing condition requiring specified representations and warranties made at signing to remain accurate at closing, usually under…

A buyout fund is a private-equity fund that invests primarily in established companies through acquisitions designed to obtain control or substantial…

Call protection in a loan is a contractual restriction, premium or fee that protects lenders against specified early repayments, refinancings or repricing…

Net operating income divided by property value — a rough yield measure for real estate.

A capital account is a partnership bookkeeping account that records specified contributions, allocations, distributions and other adjustments attributable to a…

A capital call is a formal request by a private fund or its general partner requiring an investor to contribute a specified amount of previously committed…

A capital commitment is the contractual amount an investor agrees to contribute to a private fund when valid capital calls are made, subject to the fund…

Capital expenditures are cash outlays or accrued investments for long-lived productive assets such as property, plant, equipment, networks and major…

Capital intensity describes how much capital investment a business requires relative to the scale of operations. One common company-reported version divides…

The hierarchy of claims on a property's cash flow, from senior debt through preferred equity to common equity.

Carried interest is a contractual allocation of private-fund profits to the general partner, sponsor or affiliated carry vehicle, usually after specified…

Case Closing is the formal administrative conclusion of a bankruptcy case after the estate is fully administered, distinct from dismissal, conversion, plan…

Case Reopening is the bankruptcy procedure under Section 350(b) and Bankruptcy Rule 5010 that allows a closed case to be reopened to administer assets, provide…

Cash and cash equivalents generally include cash on hand, demand deposits and short-term, highly liquid investments readily convertible to known amounts of…

Cash Collateral is cash, deposit accounts, securities, cash equivalents and specified proceeds or revenues in which the bankruptcy estate and another entity…

The cash conversion cycle estimates the number of days between cash being committed to operations and cash being recovered from customers, after accounting for…

The cash ratio compares a company’s most immediately available cash resources with current liabilities. A common formula is cash and cash equivalents divided…

A cash sweep is a debt provision that requires some portion of defined excess cash flow or specified cash proceeds to be used to prepay outstanding borrowings…

The Chapter 11 Exclusivity Period is the statutory period during which the debtor generally has the exclusive right to file a reorganization plan and, for a…

A Chapter 11 Trustee is a disinterested person appointed to replace the Debtor in Possession and administer the Chapter 11 estate when the court orders trustee…

Claim Estimation is the Bankruptcy Code Section 502(c) process for estimating certain contingent or unliquidated claims when fixing or liquidating them would…

A Claim Objection is a bankruptcy challenge by a party in interest to the allowance, amount, priority, secured status or other treatment of an asserted claim.

A Claims and Noticing Agent is a court-authorized bankruptcy service provider retained under 28 U.S.C. §156(c) to perform specified claims-processing, noticing…

A Claims Bar Date is the deadline established by bankruptcy rules or a court order by which specified creditors must file proofs of claim or risk losing the…

Claims Reconciliation is the bankruptcy process of reviewing filed and scheduled claims, comparing them with the debtor's books and governing documents, and…

A Claims Reserve is cash, securities or other plan consideration set aside to protect potential distributions on disputed or unresolved bankruptcy claims until…

Class Acceptance is the Chapter 11 voting determination under Section 1126 that establishes whether a class of claims or interests has accepted a proposed plan…

Classification of Claims is the Chapter 11 process of grouping claims into plan classes under Section 1122 so that claims placed in the same class are…

A private-fund clawback provision is a contractual mechanism that can require the general partner or carry recipient to return previously distributed carried…

A closing condition is a requirement specified in an acquisition agreement that must be satisfied or, when legally permitted, waived before a party becomes…

A co-investment is a direct investment in a specific private-market company or transaction made alongside a private-equity sponsor, typically by an LP that…

Common stock represents an ownership interest in a corporation and generally carries a residual claim after creditors and senior securities.

A Competing Plan is a Chapter 11 plan proposed by an eligible party in interest as an alternative to another plan, typically after the debtor loses or exhausts…

Compound growth occurs when prior gains remain invested and can themselves participate in future gains or losses. It describes a mathematical process, not a…

Comprehensive income combines net income with other comprehensive income for a reporting period.

A Confirmation Hearing is the Chapter 11 court hearing required by Section 1128 at which the court determines whether a proposed plan satisfies the applicable…

A Confirmation Objection is a formal challenge by a party in interest asserting that a proposed Chapter 11 plan fails one or more requirements for confirmation…

A Confirmation Order is the bankruptcy court order confirming a Chapter 11 plan after the court determines that the applicable confirmation requirements have…

Consent Rights are contractual approval rights that require a company to obtain a specified investor’s or stockholder group’s consent before taking enumerated…

A Consent Solicitation is a process in which an issuer or borrower asks holders of debt securities or loans to approve specified amendments, waivers or other…

A continuation fund is a new private investment vehicle formed to acquire one or more portfolio assets from an existing fund, typically while the same sponsor…

Control Securities are securities held by an affiliate of the issuer, such as a person who directly or indirectly controls, is controlled by, or is under…

A Convenience Class is a separate Chapter 11 class of relatively small unsecured claims that a plan groups together at a court-approved threshold for…

Convertible securities are commonly bonds, notes or preferred shares that can convert into common stock or another security under specified terms.

A lender Cooperation Agreement is an agreement among creditors to coordinate specified actions, information sharing and negotiations, often to reduce the risk…

Cost of goods sold is the cost assigned to goods sold during a reporting period and is deducted from revenue to calculate gross profit.

Covenant stripping is the removal or material weakening of restrictive covenants and related creditor protections from existing debt, commonly through a…

A covenant-lite loan is a loan that has fewer traditional financial maintenance covenants than a covenant-heavy loan, or no broadly applicable maintenance…

Cramdown is the Chapter 11 mechanism under Bankruptcy Code Section 1129(b) that can allow a court to confirm a plan despite rejection by an impaired class, if…

A Credit Bid is a secured creditor's use of its allowed secured claim, rather than only cash, to bid for collateral being sold in bankruptcy, subject to…

A Creditor Standstill Agreement is an arrangement under which creditors agree for a defined period not to accelerate debt, enforce collateral or exercise other…

Creditor-on-creditor violence is market slang for liability-management transactions in which one creditor group obtains superior priority, collateral…

A Cure Claim is the amount asserted or determined to be required to cure qualifying defaults under an executory contract or unexpired lease that a debtor seeks…

Current assets are assets expected to be converted into cash, sold or consumed within the company’s normal operating cycle or current classification period.

Current liabilities are obligations expected to be settled within the company’s normal operating cycle or current classification period.

The Current Public Information Requirement is a Rule 144 condition requiring adequate current information about the issuer to be publicly available when the…

The current ratio is a liquidity ratio calculated as current assets divided by current liabilities. A ratio of 1.5x means reported current assets equal one and…

Days inventory outstanding estimates the average number of days inventory remains on hand before sale or use. A common formula divides average inventory by…

Days payable outstanding estimates the average number of days a company takes to pay suppliers. A common formula divides average accounts payable by average…

Days sales outstanding estimates the average number of days revenue remains tied up in accounts receivable before collection. A common formula divides average…

A debt commitment letter is an agreement in which lenders or arrangers commit, subject to stated terms and conditions, to provide debt financing for an…

A debt exchange offer is an offer by an issuer or borrower to holders of existing debt to surrender that debt in exchange for newly issued debt or other…

Debt paydown is the reduction of a portfolio company’s outstanding borrowings after an acquisition, often through scheduled amortization, optional prepayments…

Debt Recharacterization is a bankruptcy doctrine under which a court determines that an advance labeled as debt is, in substance, an equity contribution rather…

The debt service coverage ratio compares a defined measure of earnings or cash flow with required debt service, usually including interest and scheduled…

A debt-for-equity swap is a restructuring transaction in which a creditor exchanges or converts some or all of a debt claim into equity ownership in the…

The debt-to-capital ratio expresses total debt as a proportion of total capital, defined as total debt plus total equity. It measures the share of the capital…

A Debtor in Possession, or DIP, is a Chapter 11 debtor that remains in possession and control of its business and bankruptcy estate while exercising most…

Debtor-in-Possession, or DIP, Financing is credit obtained after a bankruptcy filing to fund a debtor's operations and restructuring while the debtor remains…

Deemed Acceptance is the Section 1126(f) rule that conclusively presumes an unimpaired Chapter 11 class, and every holder in that class, to have accepted the…

Deemed Rejection is the Section 1126(g) rule that treats a Chapter 11 class as not accepting a plan when holders in that class receive or retain no property…

A Defaulting Lender is a lender that meets one or more conditions specified in a credit agreement, commonly including failure to fund required loans or…

Deferred consideration in a private-market secondary transaction is the portion of an agreed purchase price that the buyer pays to the seller at a later date…

**Deferred revenue** is a liability representing customer consideration received or billed before the company has earned the related revenue. Under…

Demand Registration Rights are contractual rights allowing qualifying holders of Registrable Securities to require an issuer to pursue a Securities Act…

**Depreciation** is the systematic allocation of the cost of a tangible long-lived asset over its estimated useful life. It reduces accounting earnings over…

Diluted weighted-average shares outstanding are the EPS denominator after starting with basic weighted-average shares and adding the effect of qualifying…

A direct listing is a method for a company to list securities on a public exchange without conducting a traditional underwritten initial public offering.

Directed Selling Efforts are activities undertaken for the purpose of, or that could reasonably be expected to have the effect of, conditioning the U.S. market…

A Disclosure Statement is the Chapter 11 document that provides creditors and other voting stakeholders with information about the debtor, proposed plan…

A Disclosure Statement Hearing is the Chapter 11 court hearing at which the court considers whether a proposed disclosure statement contains Adequate…

A discount to NAV occurs when a private-market interest is purchased or sold for less than the net asset value reported for that interest at the agreed…

A Disputed Claim is a bankruptcy claim that remains subject to an unresolved objection, challenge, estimation issue or other dispute and therefore has not yet…

A distressed debt exchange is a debt restructuring in which a financially stressed issuer offers creditors new debt, securities, cash or a combination in place…

Distributed to paid-in (DPI) is the ratio of cumulative distributions made to investors to the capital those investors have contributed to the fund.

A Distribution Agent is the person or entity designated under a Chapter 11 plan to make distributions of cash, securities or other consideration to holders of…

A Distribution Compliance Period is the Regulation S period during which specified securities remain subject to additional offshore-offering restrictions…

A distribution waterfall is the contractual sequence of tiers used to allocate a private fund’s distributions among limited partners, the general partner and…

Diversification is the practice of spreading investment exposure across and within asset classes to reduce dependence on any single security, issuer, sector or…

A dividend recapitalization is a transaction in which a company raises new debt or refinances its capital structure and uses some of the proceeds to pay a…

Investing a fixed amount on a fixed schedule regardless of price, which smooths the entry price over time.

Double-dip financing is a liability-management structure designed to give new-money lenders two claim paths or sources of credit support against enterprise…

Drag-Along Rights are contractual rights allowing a qualifying majority or specified selling holder to require other holders to participate in an approved sale…

Drop-down financing is a liability-management structure in which a borrower transfers assets to an unrestricted subsidiary, non-guarantor or other entity…

Dry powder is industry shorthand for capital that a private-market manager has available to deploy, commonly including committed but uncalled capital that…

Dual-class shares are two classes of common stock with different rights, most often different voting power.

Due diligence is the structured investigation of a potential investment or acquisition to test information, identify risks and validate the assumptions…

A Dutch Auction loan repurchase is a structured process under which a borrower or permitted affiliate invites eligible term lenders to offer loans for sale…

An earnout is contingent purchase consideration that becomes payable after closing if contractually defined financial, operating, market or other milestones…

An EBITDA add-back is an adjustment permitted by a credit agreement that increases covenant or adjusted EBITDA by reversing specified expenses, losses or…

The Effective Date of a Chapter 11 plan is the date specified under the plan when its conditions precedent have been satisfied or waived and the restructuring…

A company’s effective tax rate commonly compares income tax expense or benefit with pretax income for a reporting period.

An employee stock purchase plan lets eligible employees purchase employer shares, usually through payroll deductions and often at a discount.

An entry multiple is the valuation multiple applied to a company’s financial metric—commonly enterprise value divided by EBITDA—when a private equity investor…

Equitable Subordination is the Bankruptcy Code Section 510(c) doctrine under which a court may subordinate all or part of an allowed claim or interest to…

An equity commitment letter is a contract under which a sponsor, fund or other equity investor commits to contribute a specified amount of equity capital to an…

An Equity Commitment Premium is consideration granted to investors for committing new equity capital to a restructuring transaction, commonly as part of a…

An equity cure is a credit-agreement right allowing a borrower or its equity owner to contribute qualifying equity after a financial covenant breach and have…

In an acquisition, escrow is an arrangement in which money, securities or other property is placed with an independent escrow agent and released according to…

An excess cash flow sweep is a mandatory prepayment mechanism requiring a borrower to use a defined portion of Excess Cash Flow, calculated under the credit…

Exchange Act Section 10(b) prohibits using a manipulative or deceptive device or contrivance, in connection with the purchase or sale of a security, in…

Exchange Act Section 20(a) is a control-person liability provision. A person who directly or indirectly controls someone liable under the Exchange Act or its…

An exclusivity period is a negotiated span during which a seller agrees to restrict or stop discussions with competing buyers while a selected bidder pursues a…

An Exculpation Provision is a Chapter 11 plan provision that limits specified liability of defined parties for certain acts or omissions connected to the…

An Executory Contract in bankruptcy is a contract subject to treatment under Bankruptcy Code Section 365 that the trustee or debtor in possession may generally…

Exercise Deadline is the final date and time by which Subscription Rights must be validly exercised, including delivery of required instructions and payment…

An exit consent is a consent to amend existing debt documents that is delivered by a creditor in connection with exchanging or tendering that debt, typically…

Exit Financing is debt or other committed financing arranged for a debtor's emergence from Chapter 11 to fund plan distributions, repay or refinance DIP and…

An exit multiple is the valuation multiple applied to a company’s financial metric when estimating or measuring the enterprise value at which a private equity…

The annual percentage of assets a fund charges to cover its operating costs. It is deducted from returns automatically.

An Extension Amendment is a credit-agreement amendment used to establish extended loans or commitments for lenders that accept an offer to move their existing…

The Fair and Equitable Test is the class-specific Chapter 11 cramdown standard in Section 1129(b)(2) that governs how an impaired class that has not accepted…

Fair value is an estimated measurement of an asset or liability under an applicable valuation framework, commonly used when a current market quotation is…

The Feasibility Test is the Chapter 11 confirmation requirement in Section 1129(a)(11) that a confirmed plan not be likely to lead to liquidation or another…

A Final Decree is the Chapter 11 court order entered after the estate is fully administered that formally closes the bankruptcy case under Bankruptcy Rule 3022.

A financial maintenance covenant is a credit-agreement requirement that a borrower satisfy a specified financial ratio or threshold on recurring test dates…

A financial sponsor is an investment firm—commonly a private equity firm—that raises and manages capital, acquires or invests in companies, and exercises…

A financing condition is a closing condition that makes a buyer’s obligation to complete an acquisition contingent on obtaining specified debt, equity or other…

Firm commitment underwriting is an offering structure in which underwriters agree, subject to contractual conditions, to purchase the offered securities from…

A First-Day Motion is a Chapter 11 motion filed at or shortly after the bankruptcy petition seeking expedited court authority for operational, financing or…

First-lien debt is secured debt that holds the first contractual lien priority over specified collateral, subject to permitted liens, equal-priority…

The fixed-charge coverage ratio compares a defined earnings or cash-flow measure with fixed financing obligations. Included charges vary by company and credit…

A follow-on offering is an offering of shares after a company has already completed its IPO and is publicly traded.

A forbearance agreement is a contract in which a creditor agrees, subject to specified conditions and for a limited period, not to exercise certain rights or…

Form 144 is the SEC notice used for specified proposed sales of securities in reliance on Rule 144 when the rule’s filing threshold and other conditions…

Form D is an SEC notice filing used for offerings relying on Regulation D and certain other exempt-offering provisions.

The federal forward-looking-statement safe harbor in Exchange Act Section 21E protects specified forward-looking statements from liability in covered private…

The fraud-on-the-market presumption is a rebuttable reliance presumption recognized in Basic Inc. v. Levinson for appropriate Rule 10b-5 cases involving…

A Fraudulent Transfer is a transfer or obligation that can be avoided under Bankruptcy Code Section 548 when statutory requirements involving actual intent or…

A Free Writing Prospectus is a written offering communication used in connection with a registered securities offering that qualifies under Securities Act…

A fund of funds is an investment vehicle that allocates capital across multiple underlying funds, creating a second layer between the investor and the…

A fund term is the contractual period during which a closed-end private fund is expected to operate before liquidation, subject to any extension…

Fund-level leverage is borrowing incurred by an investment fund or related vehicle, creating debt exposure above the individual leverage that may exist inside…

A fundamental representation is a representation and warranty that an acquisition agreement designates as sufficiently basic to the transaction that it…

A general partner (GP) is the partner with management authority over a limited partnership, subject to the partnership agreement, applicable law and any duties…

General solicitation is broad public advertising, promotion or outreach used to identify or attract potential investors for a securities offering.

Good Faith Confirmation is the Section 1129(a)(3) requirement that a Chapter 11 plan be proposed in good faith and not by any means forbidden by law before the…

**Goodwill** is an acquisition-related asset generally created when the consideration paid for a business exceeds the fair value of its identifiable net…

A GP catch-up is a distribution-waterfall tier that allocates a high percentage of incremental proceeds to the general partner or carry recipient after…

A GP-led secondary is a private-market transaction initiated or organized by a fund sponsor or general partner to create liquidity or restructure existing fund…

Gross IRR is an internal rate of return calculated before specified fund-level fees, expenses and carried interest, using the cash flows and valuation…

Gross profit is the amount of revenue remaining after subtracting cost of goods sold, cost of sales or cost of revenue.

A grower basket is a covenant basket whose permitted amount is tied wholly or partly to a financial measure such as EBITDA, allowing capacity to expand as the…

Growth equity is a private-equity strategy that provides capital to established, rapidly growing companies, often through minority or non-control investments…

Gun-Jumping is the securities-law term for offering, promotional or sales activity that violates Securities Act restrictions on communications or transactions…

A hell or high water covenant is an M&A regulatory-efforts provision requiring a party—usually the buyer—to take very broad or all necessary actions to obtain…

A holdback is a portion of acquisition consideration that is not paid immediately to the seller and is retained or set aside for specified post-closing…

An Impaired Class is a Chapter 11 class of claims or interests whose legal, equitable or contractual rights are altered by the plan in a manner that does not…

Income tax expense is the accounting tax cost recognized in earnings for a reporting period and can include current and deferred tax components.

An incremental facility is additional term-loan or revolving-credit capacity that a borrower can add under an existing credit agreement, subject to the…

An incurrence covenant is a credit-agreement restriction that is tested when a borrower proposes to take a specified action—such as incurring debt, making an…

Indemnification is a contractual remedy under which one party agrees to compensate another for specified losses arising from defined events, such as breaches…

An indemnity basket is an aggregate loss threshold that must be reached before specified indemnification claims become recoverable under an acquisition…

An indemnity cap is a contractual ceiling on the aggregate liability that a party bears for specified indemnification claims under an acquisition agreement.

An Indenture Trustee is the trustee appointed under a bond indenture to act in specified capacities for holders of debt securities, including exercising…

An indication of interest, or IOI, is a preliminary proposal in which a potential buyer outlines the price, structure or other key terms it may be willing to…

Inflation is a sustained increase in the general level of prices over time. As prices rise, each dollar generally buys fewer goods and services, reducing…

Information Rights are contractual rights requiring a company to provide specified investors with financial statements, operating information, access to books…

An initial public offering, or IPO, is the first time a company offers and sells shares of its capital stock to the public.

Insider ownership generally describes shares beneficially owned by officers, directors and other insiders or affiliated holders.

Institutional ownership refers to shares held by professional investment organizations such as advisers, pension funds, insurers and banks.

**Intangible assets** are identifiable assets without physical substance. Examples can include technology, customer relationships, licenses, trademarks…

The integration doctrine is the securities-law framework used to determine whether two or more offerings should be treated as a single offering when evaluating…

An intercreditor agreement is a contract among creditor groups, agents or collateral representatives that establishes their relative rights with respect to…

Interest expense is the financing cost recognized for borrowed money and certain other interest-bearing obligations during a reporting period.

Interest income is income earned from lending money or holding interest-bearing assets such as deposits, securities, loans and certain receivables.

Internal rate of return (IRR) is the discount rate that makes the net present value of an investment’s cash inflows and outflows equal zero.

**Inventory** consists of goods, materials and production costs held for sale or for use in producing goods that will be sold. Common categories include raw…

Inventory turnover measures how many times inventory is sold or otherwise consumed relative to average inventory during a period. A common formula is cost of…

Invested capital is an analytical measure of capital committed to a company’s operating business. Common approaches use debt plus equity less cash or operating…

Investing is the commitment of money to assets with the expectation of earning a return over time, while accepting that outcomes are uncertain and loss is…

An investment period is the contractually defined phase of a private fund during which the manager generally has authority to call committed capital for new…

An Investor Rights Agreement is a contract between a company and one or more investors that grants specified governance, information, participation…

Involuntary Bankruptcy is a bankruptcy case initiated by qualifying creditors or other statutorily authorized petitioners against an eligible debtor under…

An Irrevocable Proxy is a proxy that cannot be revoked during its valid term when the governing law’s requirements for irrevocability are satisfied, allowing…

Issued shares are shares a corporation has formally issued to shareholders or other holders and can include shares later held in treasury.

The J-curve is the common private-fund pattern in which early returns or net cash flows are negative before improving as investments mature and realizations…

A J.Crew Blocker is market shorthand for a credit-agreement provision designed to prevent a borrower from transferring material intellectual property or other…

Joint Administration is a bankruptcy case-management procedure that allows related cases to share administrative functions such as a docket, notices, hearings…

A lead underwriter is an investment bank or broker-dealer that takes a principal coordinating role in a securities underwriting, often managing the syndicate…

A lender replacement provision, commonly called a yank-a-bank provision, allows a borrower to require a specified lender to assign its loans and commitments to…

A letter of intent, or LOI, is a preliminary transaction document that records the principal terms on which parties intend to pursue a deal before negotiating…

A leveraged buyout, or LBO, is an acquisition in which the buyer finances a substantial portion of the purchase price with borrowed money, usually supported by…

A leveraged loan is a corporate loan to a borrower whose leverage or credit profile places the financing within a lender’s or market participant’s…

A Liability Management Transaction, or LMT, is a financing or restructuring transaction used to alter a company's debt obligations, liquidity, maturity…

A limited guarantee in sponsor-backed M&A is a contract under which a sponsor, fund or other guarantor guarantees specified obligations of the acquisition…

A limited partner (LP) is an investor or other partner in a limited partnership whose rights, obligations, capital commitment and economic participation are…

A limited partnership agreement (LPA) is the governing contract of a fund organized as a limited partnership, defining the rights, duties, economics…

A Liquidating Plan is a Chapter 11 plan that provides for the sale or disposition of all or substantially all estate property and distribution of the resulting…

A Liquidating Trust is a post-confirmation trust formed under a bankruptcy plan to receive remaining assets, liquidate or monetize them, resolve specified…

Liquidation Value is the estimated net value available for distribution to creditors and other stakeholders if a business's assets are sold or otherwise…

Liquidity describes how readily an investment can be converted to cash without substantial delay, transaction cost or adverse price impact. Liquidity can…

A Litigation Trust is a post-confirmation trust created under a Chapter 11 plan to hold, investigate, prosecute, settle and monetize specified causes of action…

A lock-up agreement restricts specified shareholders from selling shares for a stated period after an IPO or other transaction.

Long-term debt generally refers to borrowings whose repayment extends beyond the current period. It can include bonds, senior notes, term loans and…

Loss causation is the requirement that a private securities-fraud plaintiff prove that the defendant's alleged violation caused the economic loss for which…

An LP-led secondary is a transaction in which an existing limited partner sells all or part of its interest in one or more private funds to a secondary buyer.

A Make-Whole Premium is an amount a bond issuer may be required to pay above principal when redeeming debt before a specified date, generally designed to…

A management buyout, or MBO, is a transaction in which members of a company’s existing management team acquire all or a controlling portion of the business…

A private-fund management fee is a recurring contractual fee paid to the investment adviser, manager or affiliated entity for managing the fund, commonly…

A management incentive plan, or MIP, is an equity or equity-linked compensation arrangement used in many sponsor-backed companies to give executives and…

Management rollover is the portion of an executive’s or management team’s pre-transaction equity that is exchanged for or reinvested into ownership of the…

A mandatory prepayment is a repayment of loan principal that a borrower is contractually required to make when specified events occur, such as generating…

The Manner of Sale Requirement is a Rule 144 condition that limits how specified affiliate resales of equity securities may be executed when the seller relies…

A Master Ballot is a Chapter 11 voting form used by a nominee, custodian or intermediary to aggregate and report plan-voting instructions received from…

A Material Adverse Effect, or MAE, is a contractually defined level of adverse change that can affect specified rights or closing conditions in an acquisition…

A materiality scrape is an acquisition-agreement provision that instructs the parties to disregard specified materiality qualifiers in representations and…

Mezzanine financing is a form of junior capital that sits below senior debt and above common equity in a company’s capital structure, often using subordinated…

Most Favored Lender, or MFL, protection is a credit-agreement provision that can require an increase in the pricing of existing term loans when specified new…

A most favored nation (MFN) clause in a private fund is a contractual right that can allow an investor to review and elect specified more favorable side-letter…

A multi-asset continuation vehicle is a new private fund formed to acquire several assets from one or more existing sponsor-managed funds while the sponsor…

Multiple expansion occurs when an investment is valued at a higher multiple of earnings, revenue or another operating metric at exit than at entry.

Multiple on invested capital (MOIC) is a ratio that compares the value generated by an investment with the capital invested in it.

A NAV facility is fund-level financing in which lending capacity and repayment support are based primarily on the net asset value or expected cash flows of…

Net Asset Value (NAV) is the value of a fund’s assets minus its liabilities at a specified measurement date. In private funds, NAV commonly represents the…

Net income is the bottom-line accounting profit or loss remaining after recognized costs, expenses, financing items, taxes and other gains or losses.

Net IRR is the money-weighted internal rate of return calculated from investor-level private-fund cash flows after applicable fund-level fees, expenses and…

New Common Equity is common ownership issued by a Reorganized Debtor or successor under a Chapter 11 plan, often distributed to creditors, sold for new capital…

New Notes are debt securities issued under or in connection with a Chapter 11 plan as part of creditor treatment, refinancing or post-emergence capitalization…

A non-pro-rata exchange is a debt exchange in which creditors within the same existing class or tranche are not offered or do not receive the same opportunity…

Noncontrolling interest represents the portion of a consolidated subsidiary’s equity owned by investors other than the controlling parent.

Nontransferable Subscription Rights are rights that generally cannot be sold, assigned or transferred by the holder, requiring the eligible holder to exercise…

An offering price is the price at which securities are initially sold to investors in an offering under the transaction’s stated terms.

The Official Committee of Unsecured Creditors, often called the UCC, is a committee appointed by the U.S. Trustee in a Chapter 11 case to represent the…

An Offshore Transaction is a Regulation S offer or sale that satisfies the rule’s location conditions, including that the offer is not made to a person in the…

An Open Market Purchase in a leveraged-loan agreement is a negotiated purchase of outstanding term loans by the borrower, a permitted subsidiary or another…

Operating cash flow, also called cash flow from operations, is the net cash provided by or used in a company’s operating activities during a reporting period.

The operating cycle estimates how long it takes a business to move from inventory investment through sale and customer collection. A common formula is DIO plus…

Operating expenses are costs recognized in running a company’s core business and can include SG&A, R&D, depreciation, restructuring and other operating costs.

Operating income is profit from operations after operating expenses are deducted but before many financing and tax items.

An Order for Relief is the Bankruptcy Code event that places a debtor under the operative relief of a particular bankruptcy chapter, occurring automatically…

Original Issue Discount, or OID, in a loan financing is the discount between a loan’s stated principal amount and the amount paid by lenders when the debt is…

An Outside Date is the deadline specified in an acquisition agreement after which one or both parties may have a right to terminate the transaction if closing…

An over-allotment option is a contractual right that can allow underwriters to purchase additional securities from the issuer on stated terms in connection…

Oversubscription Allocation is the method used to distribute securities remaining after Basic Subscription Rights are exercised among eligible holders that…

An Oversubscription Privilege is a restructuring rights-offering feature that allows an eligible participant that fully exercises its basic Subscription Rights…

Paid-in capital is the amount of an investor’s committed capital that has actually been transferred to a private fund through capital calls.

Pari passu means that specified obligations rank equally with one another in a stated respect, such as right of payment or lien priority, rather than one being…

Pari Plus Financing is market shorthand for a liability-management structure in which new-money lenders obtain a pari passu claim at existing asset-owning…

Payment-in-kind, or PIK, interest is contractual interest that is added to a loan or debt security principal balance instead of being paid currently in cash.

A performance stock unit is an equity-compensation award whose final share payout depends on specified performance conditions.

A Permitted Transfer is a transfer that an agreement expressly allows despite a broader restriction on selling, assigning or otherwise disposing of covered…

A Permitted Transferee is a person or entity eligible under an agreement to receive securities or ownership interests through a Permitted Transfer without…

The Petition Date is bankruptcy shorthand for the date a bankruptcy petition is filed and the case is commenced, creating a central reference point for estate…

Piggyback Registration Rights are contractual rights allowing eligible holders to request inclusion of their Registrable Securities in a qualifying…

A placement agent is an intermediary, typically a registered broker-dealer, engaged by an issuer to identify, solicit or facilitate investors for a private…

A Plan Administrator in bankruptcy is the person or entity appointed under a confirmed Chapter 11 plan to perform specified post-confirmation duties such as…

A Plan Ballot is the written or court-approved electronic voting instrument used by an eligible creditor or equity holder to accept or reject a Chapter 11 plan…

A Plan Distribution is cash, securities, property or other consideration delivered to a creditor or interest holder under the treatment and timing provisions…

Plan Funding is the cash, financing, asset-sale proceeds, retained liquidity, new investment or other resources used to satisfy distributions, administrative…

A Plan Injunction is an injunction contained in or approved with a Chapter 11 plan that restrains specified parties from taking actions inconsistent with the…

Plan Modification is a change to a Chapter 11 plan made under Section 1127 before confirmation or, subject to stricter limits, after confirmation but before…

A Plan of Reorganization is the Chapter 11 plan that sets the classification and treatment of claims and interests and establishes the transactions…

A Plan Proponent is the debtor or other party authorized under Bankruptcy Code Section 1121 to file or sponsor a Chapter 11 plan and carry the procedural…

Plan Securities are debt, equity, warrants or other securities issued or distributed as part of a Chapter 11 plan to implement the restructuring, fund the plan…

Plan Solicitation is the Chapter 11 process of requesting that eligible holders of impaired claims or interests accept or reject a proposed plan after the…

A Plan Supplement is the package of schedules, agreements, governance documents, financing terms and other implementation materials filed in connection with a…

A Plan Voting Deadline is the court-set cutoff by which eligible holders must submit acceptances or rejections of a Chapter 11 plan for their ballots to be…

A platform company is an initial or core portfolio company that a private equity sponsor intends to grow organically and often through subsequent add-on…

Portability in leveraged finance is a loan-document feature that allows existing debt to remain outstanding through a qualifying change of control instead of…

A portfolio company is a business in which a private equity, venture capital, growth equity or other private investment fund has made an investment.

A portfolio sale in private markets is a secondary transaction in which a seller transfers multiple fund interests or private-market positions as one…

Post-Confirmation Jurisdiction is the bankruptcy court's continuing authority, within constitutional and statutory limits, to hear specified disputes and…

Preemptive Rights are rights allowing an existing stockholder or investor to purchase a proportional share of specified new securities before or alongside…

A Preference Claim is an avoidance claim under Bankruptcy Code Section 547 seeking to unwind a qualifying prepetition transfer made for a creditor’s benefit on…

A preferred return is a contractual return priority under which limited partners generally must receive a specified return amount or accrual before carried…

Preferred stock is an equity security that generally ranks ahead of common stock for dividends and liquidation proceeds, subject to its specific terms.

A Preliminary Prospectus is a prospectus used before a Securities Act registration statement becomes effective that contains substantially the required…

A premium to NAV occurs when a private-market interest is purchased or sold for more than its reported net asset value at the agreed reference date.

A Prenegotiated Chapter 11 is a bankruptcy restructuring in which the debtor reaches substantial agreement with key stakeholders before filing but does not…

A Prepackaged Chapter 11 is a restructuring in which the debtor solicits and typically obtains plan votes before filing bankruptcy, then seeks to use those…

Prepaid expenses are amounts paid in cash before the related goods or services are consumed. They are generally recorded as assets first and recognized as…

Pretax income is accounting profit after operating and recognized non-operating items but before income tax expense or benefit.

Price stabilization is limited trading activity conducted in connection with a securities distribution that seeks to prevent or slow a decline in market price…

A primary offering is a sale of newly issued securities in which the issuer receives the sale proceeds before offering costs.

A priming transaction is a financing or restructuring that places new debt ahead of specified existing creditors in lien priority, payment priority, structural…

A Priority Claim is an unsecured bankruptcy claim entitled by statute to payment ahead of lower-ranking unsecured claims in the order established by Bankruptcy…

Private credit is lending or credit investing conducted through privately negotiated instruments outside broadly traded public bond markets, commonly involving…

Private equity is an investment category in which capital is used to acquire or hold ownership interests in companies that are not publicly traded, or to take…

A private investment in public equity, or PIPE, is a privately negotiated sale of equity or equity-linked securities by a company that already has publicly…

A private placement is a non-public offering of securities conducted in reliance on an available exemption from registration under the Securities Act of 1933.

A private secondary market is a transaction network or marketplace in which existing holders sell securities of privately held companies to other investors…

A pro forma adjustment in a credit agreement is a contractual change to historical financial results used to calculate ratios or baskets as though specified…

A Proof of Claim is a bankruptcy filing through which a creditor or other authorized party formally asserts a claim against the debtor's estate, stating the…

Property, plant and equipment are tangible long-lived assets used to operate a business. Common categories include land, buildings, machinery, equipment and…

A prospectus is an investor-facing disclosure document that describes an issuer, an offering and the securities being offered.

The Prospectus Delivery Requirement is the Securities Act framework governing when a final Section 10(a) prospectus must be delivered or made available in…

A Prospectus Supplement is an offering document that adds transaction-specific terms and updates to a base prospectus for a particular registered securities…

Protective Provisions are charter, certificate-of-designation or security terms requiring approval from a class or series of security holders before specified…

A proxy statement is a disclosure document provided when shareholder votes are solicited for meetings or corporate actions.

Public float generally refers to shares or market value held by public investors rather than affiliates under the applicable definition.

Public Market Equivalent (PME) is a family of methods that compares private-investment performance with a public-market benchmark while incorporating the…

A purchase price adjustment is a contractual mechanism that changes the amount ultimately paid in an acquisition based on specified closing-date items or…

A qualified institutional buyer, or QIB, is an institution that satisfies Rule 144A eligibility standards, generally including specified entity status and…

Quality of earnings, often abbreviated QoE, describes how well reported earnings reflect sustainable economic performance rather than temporary, non-recurring…

The quick ratio, also called the acid-test ratio, compares relatively liquid current assets with current liabilities. Inventory and prepaid assets are normally…

Ratio Debt is additional indebtedness that a credit agreement permits a borrower or Restricted Subsidiary to incur when specified pro forma leverage, coverage…

Realized value is value that has been converted from a fund’s portfolio investments into proceeds through sales, repayments, recapitalizations or other…

A recallable distribution is a private-fund distribution that, under the governing documents, can increase or restore the investor’s unfunded commitment so the…

Receivables turnover measures how quickly a company collects customer receivables relative to sales. A common analytical formula divides net credit sales by…

A Reclamation Claim is a seller’s bankruptcy right, subject to Section 546(c) and applicable law, to demand return of qualifying goods sold to an insolvent…

Recoupment is a defensive doctrine allowing a party to reduce liability on a claim by asserting an opposing claim arising from the same transaction or…

Recovery Rate is the value a creditor receives or is expected to receive after a default, restructuring or bankruptcy, expressed as a percentage of the…

A recycling provision is an LPA term that permits a private fund to reuse specified proceeds or returned capital for additional investments, expenses or other…

A Registration Rights Agreement is a contract requiring an issuer, subject to negotiated conditions, to take specified steps to register securities for resale…

A registration statement is a filing with the SEC that provides required disclosures when a security or securities offering is registered under federal…

Regulation A is a Securities Act exemption that permits eligible issuers to conduct public offerings under either Tier 1, up to $20 million, or Tier 2, up to…

Regulation Crowdfunding is a federal exemption that permits eligible companies to raise up to $5 million in a 12-month period through an online SEC-registered…

Regulation D is a set of SEC rules that provides exemptions and safe harbors from Securities Act registration for qualifying securities offerings.

Regulation S is a Securities Act framework providing non-exclusive safe harbors for qualifying offers, sales and resales of securities that occur outside the…

Regulatory approval in M&A refers to governmental clearances, consents, waiting-period expirations or other regulatory actions required before a transaction…

A Rejection Damages Claim is a bankruptcy claim for damages resulting from rejection of an executory contract or unexpired lease, with Bankruptcy Code Sections…

Reliance is the causal link between a defendant's deceptive conduct and a private securities-fraud plaintiff's decision to purchase or sell a security. Basic…

Reorganization Value is the value attributed to a company or its assets upon emergence from a bankruptcy reorganization, used in plan valuation, creditor…

A Reorganized Debtor is a debtor entity, or its designated post-emergence successor, operating after a Chapter 11 plan becomes effective under the new capital…

A Replacement Term Loan is a new term-loan tranche established under a credit agreement or refinancing amendment to replace, refinance or convert existing term…

Representation and warranty insurance, or RWI, is transaction insurance designed to cover specified losses arising from breaches of representations and…

Representations and warranties are contractual statements of fact or condition made by parties to an acquisition agreement about matters such as authority…

A repricing amendment is a credit-agreement amendment that reduces the pricing of existing loans, commonly by lowering the interest margin, changing a floor or…

Required Lenders are the lenders holding the contractually specified percentage of loans, commitments or exposures needed to approve many amendments, waivers…

A Resale Registration Statement is a Securities Act registration statement filed by an issuer to register public resale of securities held by identified…

Research and development expense represents spending on activities intended to create, improve or test products, technology, processes or scientific knowledge.

Residual value to paid-in (RVPI) is the ratio of a private fund’s remaining reported investment value to the capital contributed by its investors.

A restricted payments basket is contractual capacity within a credit agreement or indenture that permits a borrower or restricted subsidiary to make specified…

Restricted securities are securities acquired in specified unregistered transactions that cannot be freely resold into the public market unless the resale is…

A restricted stock unit is a promise or contractual right to receive company shares or equivalent value after specified vesting conditions are satisfied.

A Restricted Subsidiary is a subsidiary that remains inside the group subject to specified credit-agreement covenants and calculations, as distinguished from a…

A Restructuring Support Agreement, or RSA, is a contract among a financially distressed company and supporting creditors or other stakeholders that sets the…

Retained Causes of Action are claims, litigation rights or other estate causes preserved under a Chapter 11 plan for later enforcement by the debtor, trustee…

**Retained earnings** are the cumulative accounting profits a company has retained rather than distributed to shareholders, adjusted for dividends and other…

Investment return is the gain or loss produced by an investment over a period, including changes in value and applicable income such as interest, dividends or…

Return on capital employed measures profit relative to the capital employed in a business. A common analytical form uses EBIT divided by average capital…

Return on invested capital measures operating profit relative to the capital invested in a business. A common analytical structure is NOPAT divided by average…

A reverse stock split reduces outstanding shares while proportionally increasing price per share, all else equal.

A reverse termination fee is a contractual payment that a buyer or parent may owe the seller or target if an acquisition agreement is terminated under…

A revolving credit facility, or revolver, is a committed lending arrangement that allows a borrower to draw, repay and generally reborrow amounts up to the…

A Right of First Offer is a contractual right that generally requires an owner or issuer to give the right holder the first opportunity to make or receive an…

A Right of First Refusal is a contractual transfer right that generally gives its holder an opportunity to purchase specified securities or property on the…

A rights offering gives existing shareholders subscription rights to purchase newly issued securities, usually in proportion to current ownership.

Rights Offering Discount is the difference between the Subscription Price and a stated market-price, plan-value or other reference value used to describe the…

Investment risk is the uncertainty surrounding future investment outcomes, including the possibility of losing income, purchasing power, liquidity, or some or…

A Roadshow is an offering presentation by one or more members of issuer management that discusses the issuer, its management or the securities being offered to…

A roll-up strategy is an acquisition program that combines multiple companies in the same or adjacent markets to build a larger operating business, often…

Rollover equity is equity that an existing shareholder, seller or manager carries into the post-acquisition ownership structure rather than receiving cash for…

SEC Rule 10b-5 makes it unlawful, in connection with the purchase or sale of a security, to employ a fraudulent scheme, make a material misstatement or…

Rule 144 is a Securities Act safe harbor that allows public resale of restricted or control securities when its applicable conditions are satisfied.

A Rule 144 Affiliate is a person that directly or indirectly controls, is controlled by, or is under common control with an issuer for purposes of applying…

The Rule 144 Holding Period is the minimum time restricted securities generally must be held before they can be resold in reliance on Rule 144, subject to the…

The Rule 144 Volume Limitation restricts the amount of securities an affiliate may sell in reliance on Rule 144 during a rolling three-month measurement period.

Rule 144A is a Securities Act safe harbor that permits qualifying private resales of restricted securities to qualified institutional buyers or purchasers…

Rule 144A Eligible Securities are securities that satisfy Rule 144A’s security-type conditions for private institutional resale, including the rule’s…

The Rule 144A Information Requirement is the condition requiring specified nonreporting issuers to make reasonably current business and financial information…

Rule 145 is an SEC rule treating specified security reclassifications, mergers, consolidations and asset-transfer transactions submitted for holder vote or…

Rule 163B is an SEC rule allowing issuers and persons authorized to act for them to test institutional investor interest in a contemplated registered…

Rule 430A is an SEC rule allowing specified pricing and pricing-dependent information to be omitted from a prospectus contained in a registration statement…

Rule 430B is an SEC rule allowing specified information to be omitted from certain shelf-registration prospectuses at effectiveness and later supplied through…

Rule 506(b) is a Regulation D safe harbor that permits an issuer to raise an unlimited amount without Securities Act registration while prohibiting general…

Rule 506(c) is a Regulation D exemption that permits general solicitation and advertising if all purchasers are accredited investors and the issuer takes…

Sacred rights are lender protections covering specified core economic or structural loan terms that cannot be amended or waived solely through the ordinary…

Scienter is the culpable state of mind required for a private damages claim under Exchange Act Section 10(b) and Rule 10b-5. The Supreme Court describes it as…

Second-lien debt is secured debt whose lien on specified shared collateral ranks behind first-lien obligations under the applicable security and intercreditor…

A secondary buyout is a transaction in which one private equity sponsor sells a portfolio company to another private equity sponsor, typically through a new…

A secondary offering is a public sale of already-issued shares by existing shareholders rather than the issuing company.

A secondary transaction is a negotiated purchase and sale of an existing private-market fund interest, portfolio asset or related economic exposure after the…

Section 11 Liability is the Securities Act civil-liability framework for material misstatements or omissions in a Registration Statement when the relevant part…

A Section 1111(b) Election is a Chapter 11 election that can allow a qualifying class of secured claims to have the entire allowed claim treated as secured for…

The Section 1129(a)(10) Requirement is the Chapter 11 confirmation rule that, when at least one class of claims is impaired, at least one impaired class of…

The Section 1145 Exemption is a Bankruptcy Code securities-law exemption that can permit specified securities issued under a Chapter 11 plan to be offered or…

Section 12(a)(1) Liability is the Securities Act civil remedy against a person who offers or sells a security in violation of Securities Act Section 5.

Section 12(a)(2) Liability is the Securities Act civil-liability framework for specified securities offers or sales made by means of a prospectus or oral…

A Section 363 Sale is a bankruptcy-court-approved sale of estate property under Bankruptcy Code Section 363, commonly used to sell substantial assets or an…

Section 4(a)(1) is the Securities Act transactional exemption for transactions by persons other than an issuer, underwriter or dealer.

Section 4(a)(2) of the Securities Act exempts transactions by an issuer that do not involve a public offering from Securities Act registration.

Section 4(a)(7) is a Securities Act exemption for qualifying resales of securities to accredited investors when specified transaction, solicitation and…

A Section 503(b)(9) Claim is an administrative expense for the value of goods received by the debtor within 20 days before bankruptcy when the goods were sold…

A Secured Claim is a bankruptcy claim secured by a lien or other qualifying interest in property, with the secured portion generally determined under…

The Securities Act Effective Date is the date a Registration Statement becomes effective under Securities Act Section 8 or an applicable SEC rule, allowing…

Securities Act Section 13 sets filing deadlines for specified civil claims under Sections 11 and 12. Section 11 and Section 12(a)(2) claims generally use a…

Securities Act Section 15 is a control-person liability provision. A person who controls someone liable under Securities Act Section 11 or Section 12 can be…

Securities Act Section 5 is the core federal provision regulating offers, sales and prospectus use for securities that must be registered, unless an exemption…

A selling shareholder is an existing owner of securities that sells some or all of those securities to other investors through an offering or registered resale.

Selling, general and administrative expense is a broad operating-expense category covering many selling, corporate and support costs outside direct production.

Senior secured debt is debt that is senior in the borrower’s contractual capital structure and secured by liens on specified collateral, giving lenders a claim…

The risk that poor market returns early in retirement permanently reduce how long a portfolio lasts.

A Serta Blocker is market shorthand for credit-agreement language designed to prevent or restrict Serta-style non-pro-rata uptiers by requiring heightened…

Setoff is a creditor right, preserved subject to Bankruptcy Code limits, to offset a mutual debt the creditor owes to the debtor against a qualifying claim the…

Share dilution occurs when new shares or share equivalents increase the ownership denominator and reduce an existing shareholder’s percentage claim unless the…

A share repurchase occurs when a company buys back its own shares through open-market purchases, tender offers or other permitted transactions.

**Shareholders' equity**, also called stockholders' equity, is the accounting residual attributable to shareholders after liabilities are subtracted from…

Shares outstanding are issued shares currently held outside the issuing company, excluding shares held in treasury.

A shelf registration allows eligible issuers to register securities for potential sale in one or more later offerings.

A Shelf Registration Statement is a Securities Act registration statement structured to permit securities to be offered on a delayed or continuous basis when…

A Shelf Takedown is a specific securities offering conducted from an already effective Shelf Registration Statement rather than through a newly filed full…

Short-term debt generally includes borrowings due within the current period and can also include current installments of longer-term debt depending on…

A side letter is an agreement between a private-fund sponsor or related party and a specific investor that grants, clarifies, modifies or supplements rights or…

A single-asset continuation vehicle is a new private investment vehicle formed to acquire one portfolio company or other asset from an existing sponsor-managed…

A SOFR floor is the minimum SOFR value that a credit agreement uses to calculate interest on a floating-rate loan, even when the applicable SOFR reference rate…

Soft call protection is a loan provision requiring a borrower to pay a premium, commonly for a limited period, when specified term loans are refinanced…

A Solicitation Procedures Order is a Chapter 11 court order approving the mechanics for distributing plan materials, soliciting and tabulating votes, setting…

A sophisticated investor, in the Rule 506(b) context, is a non-accredited purchaser who has enough knowledge and experience in financial and business matters…

Sources and uses is a transaction schedule that reconciles the funding available for an acquisition with the cash required to close it. Sources commonly…

A special indemnity is a negotiated indemnification obligation covering a specifically identified risk or matter rather than relying only on the agreement’s…

Specific performance is an equitable remedy that can require a party to perform its contractual obligations, including in some acquisition agreements an…

A sponsor equity contribution is the capital a private equity sponsor or its affiliated fund contributes to an acquisition vehicle to fund the portion of a…

Stabilization is a regulated securities-market activity in which a person places bids or purchases in connection with an offering for the purpose of preventing…

Locking crypto assets to help secure a proof-of-stake network in exchange for protocol rewards.

A Stalking Horse Bid is an initial negotiated offer for bankruptcy assets that serves as the baseline or floor for a court-supervised sale process while…

A Standstill Agreement is a contract under which a party temporarily agrees not to exercise specified legal, financing, ownership, enforcement or transaction…

A stapled secondary is a private-market transaction in which a secondary purchase is linked to, negotiated alongside or conditioned on a new primary capital…

A Statutory Prospectus is a prospectus that satisfies Securities Act Section 10(a), containing the disclosure required for use as the final prospectus in a…

A stock option gives the holder the right to buy a specified number of shares at a fixed exercise price before expiration, subject to award terms.

A stock split increases the number of shares while proportionally reducing the price per share, all else equal, without mechanically changing shareholders’…

Stock-based compensation is compensation paid through equity-linked awards such as restricted stock, RSUs, performance awards and options. The expense can be…

A Stockholders Agreement is a contract among stockholders, or among stockholders and the company, that governs specified ownership, voting, governance…

A strategic buyer is an operating company or corporate acquirer that purchases another business because the target may create strategic value through products…

Structural subordination is the priority disadvantage faced by a creditor of a parent or holding company when valuable assets and liabilities sit in…

Subordinated debt is debt that contractually ranks behind specified senior obligations for payment, recovery or both under the applicable debt and…

A subscription agreement is the contract and investor questionnaire through which an investor applies to purchase an interest in a private fund, makes required…

A subscription line of credit is a fund-level borrowing facility typically supported by the credit quality and uncalled capital commitments of the fund’s…

Subscription Period is the window during which eligible holders may exercise Subscription Rights and deliver the required payment and documentation before the…

Subscription Price is the amount an eligible holder must pay per share, unit or other security to exercise Subscription Rights in a rights offering or…

Subscription Rights are rights granted to eligible holders in a restructuring financing to purchase specified new securities on stated terms, often in…

Substantial Consummation is the Chapter 11 status defined in Section 1101(2) by specified implementation steps involving major plan transfers, assumption of…

Substantive Consolidation is an equitable bankruptcy remedy that, when ordered, can combine the assets and liabilities of separate legal entities for…

Superpriority debt is debt given a priority position ahead of specified existing obligations through contractual lien or payment arrangements, a…

A survival period is the contractual period after closing during which specified representations, warranties, covenants or indemnification rights remain…

A Syndicate Covering Transaction is a purchase of an offered security by or for the account of the underwriting syndicate to reduce a short position created in…

Tag-Along Rights are contractual rights allowing eligible minority holders to participate in a qualifying sale by a larger or controlling holder, generally by…

Tangible book value is an adjusted equity measure that generally removes goodwill and other intangible assets from book equity.

Tangible book value per share divides tangible common equity by common shares outstanding.

Temporary Allowance for Voting Purposes is the Rule 3018(a) procedure that permits a bankruptcy court to temporarily allow a disputed claim or interest in an…

A tender offer is a public offer to security holders to sell securities to a bidder on stated terms during a defined period.

A term loan is debt advanced for a specified term and repaid according to the loan agreement through scheduled amortization, mandatory prepayments, a maturity…

Testing the Waters is a securities-offering practice that allows eligible issuers or authorized persons to communicate with specified institutional investors…

A Third-Party Release in Chapter 11 is a release of specified claims held by creditors or other stakeholders against nondebtor parties connected to the…

An investment time horizon is the expected number of months, years or decades until money is needed for a financial goal. Time horizon affects how investors…

A Tombstone Advertisement is a limited securities-offering communication containing only information permitted by SEC rules so it can publicize an offering…

Total assets are the accounting resources reported on a company’s balance sheet. Under the accounting equation, assets equal liabilities plus equity.

Total liabilities are the accounting obligations reported on a company’s balance sheet. They can include operating liabilities, financial debt, leases, taxes…

Total value to paid-in (TVPI) is the ratio of cumulative distributions plus remaining fund value to the capital investors have contributed.

A trade sale is the sale of a portfolio company to an operating company or strategic corporate buyer, typically as a private negotiated acquisition rather than…

A Transfer Restriction is a contractual, charter-based, security-based or legal limitation on a holder’s ability to sell, assign, pledge, gift or otherwise…

Transferable Subscription Rights are rights that may be sold, assigned or otherwise transferred before expiration under the terms of the offering, allowing…

Treasury stock consists of a company’s own issued shares that were later reacquired and are held by the company rather than remaining outstanding.

A U.S. Trustee is a Department of Justice official in the United States Trustee Program who oversees bankruptcy case administration, monitors compliance and…

An underwriter is a financial intermediary that participates in structuring, pricing and distributing securities in an offering, with contractual…

Underwriting is the process and contractual arrangement through which financial firms help structure, price and distribute securities in an offering.

An Underwriting Agreement is the contract between an issuer or selling security holders and one or more underwriters that sets the terms, conditions and…

An Underwriting Discount is the difference or disclosed compensation amount retained by underwriters in connection with purchasing or distributing securities…

An underwriting spread is the difference between the public offering price of a security and the amount paid to the issuer by the underwriters, commonly…

An underwriting syndicate is a group of investment banks or broker-dealers that jointly participate in distributing a securities offering under agreed roles…

Unfair Discrimination is the Chapter 11 cramdown limitation in Section 1129(b)(1) that prevents a plan from treating a dissenting impaired class materially…

An unfunded commitment is the remaining portion of an investor’s contractual capital commitment to a private fund that has not yet been contributed and may…

An Unimpaired Class is a Chapter 11 class whose legal, equitable and contractual rights are left unaltered by the plan or otherwise receive treatment that…

Unitranche financing is a loan structure that combines financing economics that might otherwise be split across separate senior and junior debt tranches into a…

Unrealized value is the reported value of investments that remain held by a fund and have not yet been fully converted into realized proceeds.

An Unrestricted Subsidiary is a subsidiary that has been validly designated outside the credit agreement’s restricted group and is therefore generally excluded…

An Unsecured Claim is a bankruptcy claim that is not supported by a valid collateral interest for the relevant amount, including ordinary unsecured obligations…

An uptier transaction is a liability-management transaction in which a borrower and participating creditors create or exchange into debt that ranks ahead of…

Venture capital is a form of private equity that finances startups and young companies expected to pursue rapid growth, typically through staged equity…

Vesting of Estate Property is the post-confirmation transfer effect under Section 1141(b) by which estate property generally vests in the debtor unless the…

A vintage year is the calendar year assigned to a private fund based on a specified formation, first-close, first-capital-call or first-investment convention…

Volatility describes the magnitude and frequency of price changes over time. It is an important measure of market uncertainty, but it does not capture every…

A Voluntary Petition is the bankruptcy petition filed by an eligible debtor to commence its own bankruptcy case under the chosen chapter of the Bankruptcy Code.

Vote Designation is the Section 1126(e) remedy allowing a bankruptcy court, after notice and a hearing, to disregard an entity’s plan acceptance or rejection…

A Voting Agreement is a contract under which one or more stockholders agree how they will vote, consent or otherwise exercise specified voting power on…

Voting Certification is a Chapter 11 filing or declaration reporting and certifying plan-ballot tabulation results under the court’s local rules or…

Voting rights are shareholder rights to vote on specified corporate matters, commonly including director elections and other proposals.

The Waiting Period is the stage of a registered securities offering after the Registration Statement has been filed but before it has become effective.

A warrant is a security or contractual right that generally allows the holder to buy issuer shares at a specified exercise price before expiration.

A US tax rule that disallows a loss deduction if you buy a substantially identical security within 30 days before or after the sale.

Weighted-average shares outstanding are the average number of common shares considered outstanding during a reporting period after weighting share-count…

A Well-Known Seasoned Issuer, or WKSI, is an issuer meeting Rule 405’s eligibility, reporting-history, size or registered-debt criteria and other conditions…

Working capital is commonly calculated as current assets minus current liabilities. Positive working capital means reported current assets exceed reported…

A working capital adjustment changes acquisition consideration when closing net working capital differs from an agreed target, benchmark or “peg.”