venerdì 24 febbraio 2012

Writing in Plain English for lawyers _ LESSON 5

Write using “if-then” conditionals
Conditional statements are very common in disclosure documents— although they are rarely written that way. When we rewrote the last example as a conditional, we followed the natural English word order very closely. That’s why the sentence is easier to read.
Here are four rules of thumb to help you write conditional statements effectively:
·   One “if,” one “then” When there is only one if and one then, starting with the if may spare some of your readers from having to read the rest of the sentence. In these cases, the if clause defines who or what the “then” clause applies to.
If you invested in Class A shares, then...
·   One “if,” multiple “thens” When there is only one if and more than one then, start with the if and tabulate the thens.
·   Multiple “ifs,” one “then” When there is only one then and more than one if, start with the then and tabulate the ifs.
·   Multiples “ifs” and “thens” When there is more than one if and more than one then, you’ll probably need to break it down into more than one sentence, taking care to specify which ifs apply to which thens. If the information is still unclear, consider presenting the information in a table.

Keep your sentence structure parallel
A long sentence often fails without a parallel structure. Parallelism simply means ensuring a list or series of items is presented using parallel parts of speech, such as nouns or verbs. Note the quotation in the margin.
In this section, we’ve shown each parallel structure we’ve used in bold.
Here’s an example from a mutual fund prospectus that lacks parallel structure:
If you want to buy shares in Fund X by mail, fill out and sign the Account Application form, making your check payable to “The X Fund,” and put your social security or taxpayer identification number on your check.
If you want to buy shares in Fund X by mail, fill out and sign the Account Application form, make your check payable to “The X Fund,” and put your social security or taxpayer identification number on your check.
Here is a more subtle example from another mutual fund prospectus:

We invest the Fund’s assets in short-term money market securities to provide you with liquidity, protection of your investment, and high current income.

This sentence is unparallel because its series is made up of two nouns and an adjective before the third noun. It’s also awkward because the verb provide is too closely paired with the nominalization protection.
One logical revision to the original sentence is to change the noun series to a verb series.
We invest in short-term money market securities to provide you with liquidity, to protect your investment, and to generate high current income.
All writers, regardless of their degree of expertise, occasionally write unparallel sentences. The best way to rid your document of them is to read through it once solely to find these mistakes. Reading your docu­ment aloud can make unparallel constructions easier to spot.

Steer clear of “respectively”
How easy is it to read the following sentence once and understand what it means?
The Senior Notes and the guarantee (the “Guarantee”) of the Senior Notes by Island Holdings will constitute unsecured senior obligations of the Issuer and Island Holdings, respectively.
The senior notes are an unsecured senior obligation of the issuer, while the guarantee of the senior notes is an unsecured senior obligation of Island Holdings.
Whenever you use “respectively,” you force your reader to go back and match up what belongs to what. You may be saving words by using “respectively,” but your reader has to use more time and read your words twice to understand what you’ve written. 

domenica 5 febbraio 2012

Writing in Plain English for lawyers _ LESSON 4

Use short sentences
No one likes to read a sentence that’s two pages long. And yet, lengthy, information-packed sentences choke many prospectuses today. To complicate matters further, these sentences are filled with jargon and legalese. The longer and more complex a sentence, the harder it is for readers to understand any single portion of it.

The following description encompasses all the material terms and provisions of the Notes offered hereby and supplements, and to the extent inconsistent therewith replaces, the description of the general terms and provisions of the Debt Securities (as defined in the accompanying Prospectus) set forth under the heading “Description of Debt Securities” in the Prospectus, to which description reference is hereby made. The following description will apply to each Note unless otherwise specified in the applicable Pricing Supplement.

If you really want to root out the problem with this paragraph, you need to think of the deeper reasons why it doesn’t work. If you look beyond the language used, you’ll find that it presents complex information without first providing a context for the reader.
The rewrites that follow show two ways to provide the context, with and without tabulation.
We provide information to you about our notes in three separate documents that progressively provide more detail: 1) the prospectus, 2) the prospectus supplement, and 3) the pricing supplement. Since the terms of specific notes may differ from the general information we have provided, in all cases rely on information in the pricing supplement over different information in the prospectus and the prospectus supplement; and rely on this prospectus supplement over different information in the prospectus.

Information-packed sentences leave most investors scratching their heads. So many of these sentences have become “boilerplate” that writers cut and paste them into new documents without thinking about how they can be improved. Since these sentences can be a little intimi­dating, we thought we’d tackle another one:


The Drake Capital Corporation (the “Company”) may offer from time to time its Global Medium-Term Notes, Series A, Due from 9 months to 60 Years From Date of Issue, which are issuable in one or more series (the “Notes”), in the United States in an aggre­gate principal amount of up to U.S. $6,428,598,500, or the equiva­lent thereof in other currencies, including composite currencies such as the European Currency Unit (the “ECU”) (provided that, with respect to Original Issue Discount Notes (as defined under “Description of Notes—Original Issue Discount Notes”), the initial offering price of such Notes shall be used in calculating the aggre­gate principal amount of Notes offered hereunder).

The Drake Capital Corporation may offer at various times up to U.S. $6,428,598,500 worth of Global Medium-term notes. These notes will mature from 9 months to 60 years after the date they are purchased. We will offer these notes in series, starting with Series A, and in U.S., foreign, and composite currencies, like the European Currency Unit. If we offer original issue discount notes, we will use their initial offering prices to calculate when we reach $6,428,598,500. 
As you can see, one long sentence became four shorter sentences. The paragraph moves from the general to the specific, contains short, com­mon words, and is written in the active voice. You only need to read the paragraph once to understand it.

Replace jargon and legalese with short, common words

Ruthlessly eliminate jargon and legalese. Instead, use short, common words to get your points across. In those instances where there is no plain English alternative, explain what the term means when you first use it.

If you have been in the financial or legal industry for awhile, it may be hard to spot jargon and legalese in your writing. Consider asking someone outside the industry to check your work for incomprehensible words.

Last, don’t create new jargon that’s unique to your document in the form of acronyms or other words. It’s asking too much of your readers to memorize a new vocabulary while they are trying to understand complicated concepts. This holds true for individual and institutional investors. Note the following, which is the first sentence on the cover page of an exchange offer:

NLR Insured Mortgage Association, Inc., a Delaware corporation (“NLR MAE”), which is an actively managed, infinite life, New York Stock Exchange-listed real estate investment trust (“REIT”), and PAL Liquidating REIT, Inc., a newly formed, finite life, self-liquidat­ing Delaware corporation which intends to qualify as a REIT (“PAL Liquidating REIT”), hereby jointly offer, upon the terms and subject to the conditions set forth herein and in the related Letters of Transmittal (collectively, the “Offer”), to exchange (i) shares of NLR MAE’s Common Stock, par value $.01 per share (“NLR MAE Shares”), or, at the option of Unitholders, shares of PAL Liquidating REIT’s Common Stock, par value $.01 per share (“PAL Liquidating REIT Shares”), and (ii) the right to receive cash payable 60 days after closing on the first of any Acquisitions (as defined below) but in no event later than 270 days (nine months) following consumma­tion of the Offer (the “Deferred Cash Payment”), for all outstanding Limited Partnership Interests and Depository Units of Limited Partnership Interest (collectively, “Units”) in each of PAL Insured Mortgage Investors, a California limited partnership (“PAL 84”), PAL Insured Mortgage Investors - Series 85, A California Limited Partnership, a California limited partnership (“PAL 85”), and PAL Insured Mortgage Investors L.P. - Series 86, a Delaware limited partnership (“PAL 86”). See “THE OFFER.”

This sentence suffers from many shortcomings. It’s long and laden with defined terms and other data that mask the fundamental informa­tion: the two companies are offering to exchange their stock for the investors’ limited partnership holdings. Some of the information, such as par value and places of incorporation, can be moved to another part of the document. Much of the language modifies the subjects and the objects: this language, too, can be moved to a separate sentence or another section of the prospectus.
This example shows the hazards of creating unfamiliar acronyms. They provide false economies, especially when they are introduced on the cover page and in the first pages of the prospectus. They may save a few words, but they may also frustrate and force the reader to take more time and effort to understand the document. Where acronyms, such as REIT, are widely understood to the investing public, they can safely be used without creating confusion.
Occasionally, it’s necessary to assign a shorter word to a long proper noun and use this word throughout the rest of the document. In these rare instances, try to choose a word that has an intuitive, logical relationship to the one it’s replacing. This reduces the number of new words or phrases the reader needs to memorize to understand the document.

Choose the simpler synonym
Surround complex ideas with short, common words. For example, use end instead of terminate, explain rather than elucidate, and use instead of utilize. When a shorter, simpler synonym exists, use it.

Keep the subject, verb, and object close together

Short, simple sentences enhance the effectiveness of short, common words. We’ve covered a number of guidelines for writing shorter sentences, but there are a few more you can use to streamline your writing further.
To be clear, sentences must have a sound structure. Here are a few ways to ensure yours do.

The natural word order of English speakers is
subject-verb-object. Your sentences will be clearer if you follow this order as closely as possible. In disclosure documents, this order is frequently interrupted by modifiers. For example:


of the Class A and Class B-1 certificates will be entitled to receive on each Payment Date, to the extent monies are available therefor (but not more than the Class A Certificate Balance or Class B-1 Certificate Balance then outstanding), a distribution.


Class A and Class B-1 certificate
holders will receive a distribution on each payment date if cash is available on those dates for their class.


The following description
of the particular terms of the Notes offered hereby (referred to in the accompanying Prospectus as the “Debt Securities”) supplements, and to the extent inconsistent therewith replaces, the description of the general terms and provi­sions of the Debt Securities set forth in the Prospectus, to which description reference is hereby made.


This document describes the terms of these notes in greater detail than our prospectus, and may provide information that differs from our prospectus. If the information does differ from our prospectus, please rely on the information in this document.