Editors’ Note: this is part of our irregular series in which we answer readers’ questions. If you have a question, submit it to firstname.lastname@example.org and we will try to answer it.
What is the first integral decision a potential purchaser of a distressed business must make?
Assuming that the seller has not already decided on the mechanism for the sale, the first choice confronting the potential purchaser of a distressed business is how the sale should be effected. The four basic choices are an ordinary stock/asset purchase, an assignment for the benefit of creditors (ABC), an Article 9 purchase, or a bankruptcy acquisition. Each offers different advantages and disadvantages.
You can explore further by reading David K. Bowsher here. Likewise, you can explore related topics through the links below:
Note: This 90 Second Lesson is based, in substantial part, in material reprinted from Commercial Bankruptcy Litigation 2d and Strategic Alternatives for and Against Distressed Businesses, with permission of Thomson Reuters. For more information about these publications, please visit www.legalsolutions.com.
The editors and editorial board of DailyDAC include preeminent restructuring and insolvency professionals, journalists, and editors. They are devoted to providing reliable and plain English education and deal intelligence about assignments, corporate bankruptcy, receiverships, out-of-court workouts an similar topics.
90 Second Lesson: What is a “UCC Article 9” Sale?
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Strategic Alternatives For And Against Distressed Businesses
90 Second Lesson: How to assess whether a distressed business can be turned around?
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