Distressed Mergers and Acquisition

Acquisitions of or mergers with even slightly troubled companies can have risk. Find out how the Bankruptcy Courts can minimize or eliminate that risk.

Difficult times can provide opportunities for the acquisition of troubled companies or assets from distressed companies, and the appropriate climate for divestiture of unproductive or non-core business lines. To successfully complete such a sale or acquisition, whether through a bankruptcy process or out of court, requires counsel with the necessary skills, expertise and business sense. The firm’s bankruptcy and restructuring attorneys have decades of experience advising clients in virtually all aspects of these transactions across the US and globally. We understand the complex and competing legal and substantive rights, as well as financial and strategic interests, of buyers, sellers, and other interested parties, and are known for their ability to mobilize resources quickly and to negotiate solutions under often demanding and time sensitive circumstances.

Distressed companies can represent attractive acquisition targets. Their stock and their debt often trade at prices reflecting the difficulties they face, and they may be under pressure to sell assets or securities quickly to raise capital or pay down debt. Accordingly, prospective acquirors may have an opportunity to acquire attractive assets or securities at a discount. This outline considers how best to acquire a distressed company from every possible point of entry, whether that consists of buying existing or newly-issued stock, merging with the target, buying assets, or buying existing debt in the hope that it converts into ownership. Some modestly distressed companies require a mere “band-aid” (such as a temporary waiver of a financial maintenance covenant when the macroeconomy has led to a temporary decline in earnings, but the company is able to meet all of its obligations as they come due). Others require “major surgery” (as where the company is fundamentally over-levered and must radically reduce debt).

The firm’s business attorneys’ transactional, restructuring and acquisition experience covers the gamut of business transactions and industries including Construction, Oil & Gas, Securities, Hospitality (Hotels), Medical Facilities Acquisition, Acquisition/Divestitures, Real Estate, Aerospace/Aviation, Pharmaceutical Technology, Intellectual Property, International Business, Joint Ventures/Strategic Alliances, and Mergers and Acquisitions.

The firm’s bankruptcy and financial restructuring attorneys are recognized experts in distressed M&A and asset divestiture transactions, whether through Section 363 bankruptcy sales, Chapter 11 reorganization plans, foreclosure sales, secured party sales, receiverships or other distressed sale processes. The breadth and depth of our experience and understanding in this area is a result of our multi-disciplinary approach. We work closely with attorneys from our corporate, M&A, securities, litigation, tax, environmental, intellectual property, real estate, labor, and governmental and regulatory practice groups.

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