Alternatives to Business Bankruptcy
90 Second Lesson: Is Bankruptcy Needed if Creditors Will Just Agree to Take Less?
QUESTION: Murray D. emailed, recently: “I am a general corporate lawyer. One of my clients has been in business for 50 years. It has no bank debt but it owes its vendors about $2 million. He told me that most or all of his vendors are willing to work with him by writing some small […]
90 Second Lesson: What is an “Exchange Offer?”
QUESTION: Fred T. emailed, asking, “I own securities of a company and heard on the news that it is contemplating doing an “exchange offer.” What is an exchange offer? ANSWER: An exchange offer is one way a company can complete an out-of-court restructuring. And, for a distressed company that has public debt it may […]
The Road to an Assignment for the Benefit of Creditors (ABC): A Case Study
This detailed story illustrates how a troubled company considered its duties and its options, then executed a strategy using an Assignment for the Benefit of Creditors (“ABC”) to mitigate successfully its potential losses. This story puts meat onto more skeletal discussions of ABC rules and how they compare with competing resolution structures under the Bankruptcy […]
RECOMMENDED READING: Assignments for the Benefit of Creditors: An Overview With a California Flavor
In “Assignments for the Benefit of Creditors: Simple as ABC?” Robert L. Eisenbach III provides a brief and clear summary of ABC procedures, and illustrates the process usefully with a hypothetical scenario of a cash-negative company with insufficient money to fund further operations and no likely prospects for credit, and which has specific technology assets that a […]