Editors’ Note: this is part of our irregular series in which we answer readers’ questions. If you have a question, submit it to email@example.com 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 and similar topics.
90 Second Lesson: What is a “composition agreement?”
90 Second Lesson: What is a “UCC Article 9” Sale?
Managing Cash and Stakeholders to Turn Around a Company
Six Common Mistakes in Drafting Collateral Descriptions
You Do Not Have to Mean It: Authorizing the Filing of a Mistaken Termination Statement Suffices to End Perfection of the Security Interest [Committee (re Old GM) v. JPM]
90 Second Lesson: If I File a Chapter 7 Bankruptcy, Are the Assets of My Single-Member LLC Safe From the Trustee?
Please log in again. The login page will open in a new window. After logging in you can close it and return to this page.
Our weekly newsletter, sent every Tuesday at 9am, includes: