The goal in a Chapter 11 bankruptcy case is to formulate and seek confirmation of a plan of reorganization that will enable the debtor to emerge from bankruptcy as a viable and profitable company. In addition, a transaction may be structured, in part, as a stock sale if the transaction includes the sale of non-debtor subsidiaries.The Bankruptcy Process – Alternative Paths For example, because many government licenses and permits are generally not assignable, an acquirer of stock might avoid the requirement of having to obtain the consent of the related governmental entities to such transfer of stock. In some limited circumstances, the acquirer might agree to a different structure, such as a stock sale, because a stock sale might enable the acquirer to avoid potential problems. Typically, the debtor will not object to an asset sale if the debtor expects to liquidate because it is usually the most expedited and therefore cheapest procedure.
Almost every bankruptcy sale will take the form of an asset sale because an asset sale will enable the acquirer to purchase only desired assets and avoid many of the seller's liabilities, especially unknown liabilities. Structure of a Bankruptcy TransactionĪsset Sale.
Sub rosa plan code#
Along the way, a potential acquirer of the assets of a bankrupt entity and its counsel must not only structure an acquisition transaction and negotiate a definitive purchase agreement with the debtor/seller, but the acquirer must also navigate through the Bankruptcy Code and Bankruptcy Rules and gain an understanding of how the debtor's creditors and other affected parties impact the sale process.
The United States Bankruptcy Courts are becoming more and more crowded these days, and for every Enron and Global Crossing, there are many potential acquirers of all or part of such companies seeking to benefit from the downturn in the economy by purchasing such companies' assets at bargain prices.
0 kommentar(er)
