Waterfall Distribution

The Challenge

When disputes arise involving a waterfall distribution, it most often stems from a disparity between distributions and equity or distributions and taxes. If the court sees only the end result, they see only the disparity. Unfortunately, it can be difficult to follow the sequence of clauses spelling out the distribution formula demanded by the contract.

The Solution

Our visual communications specialists used the clauses of the contract to establish a series of towers, each representing a step in the distribution. We then ran an amount of money through the towers to show how the funds would be distributed through each step, the cumulative distribution, and its comparison to equity – thus turning a complex contract into a simple visual representation.