"Getting the Deal Done": Asset Sales in Bankruptcy Proceedings

Asset Sales Presentation – ABI 23rd Annual Spring Meeting

““Getting the Deal Done”: Asset Getting the Deal Done”: Asset Sales in Sales in

Bankruptcy ProceedingsBankruptcy Proceedings

American Bankruptcy Institute 23American Bankruptcy Institute 23rdrd Annual Spring Meeting, Washington, D.C. Annual Spring Meeting, Washington, D.C.April 30, 2005April 30, 2005

Presented by:Presented by:

Richard E. MikelsRichard E. Mikels, , Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C.Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C.

HowardHoward BrodBrod BrownsteinBrownstein, , NachmanHaysBrownstein, Inc.NachmanHaysBrownstein, Inc.

AndyAndy GrasierGrasier, , DJM Asset ManagementDJM Asset Management

CarmenCarmen H.H. LonsteinLonstein, , Bell, Boyd & Lloyd LLCBell, Boyd & Lloyd LLC

BenjaminBenjamin LL.. NortmanNortman, , Hilco Trading Co., Inc.Hilco Trading Co., Inc.

DavidDavid PeressPeress, , XRoads Solutions Group, LLCXRoads Solutions Group, LLC

LisaLisa MM. . PoulinPoulin,, FTIFTI PalladiumPalladium PartnersPartners


The Sale: The Sale:

Whether, Who, What, How, Where, To Whether, Who, What, How, Where, To WhomWhom

Richard E. Mikels Richard E. Mikels ѩѩ Howard Brod Brownstein Howard Brod Brownstein ѩѩ Andy Grasier Andy Grasier ѩѩ Carmen H. Lonstein Carmen H. Lonstein ѩѩ Benjamin L. Nortman Benjamin L. Nortman ѩѩ David Peress David Peress ѩѩ Lisa M. Poulin Lisa M. Poulin


Which of the Following is a Valid Part Which of the Following is a Valid Part of the Analysis when a Company of the Analysis when a Company

Weighs Weighs WhetherWhether to Complete a Sale of to Complete a Sale of Assets?Assets?

(a)(a) Whether a consensual out of court restructuring/turnaround is too Whether a consensual out of court restructuring/turnaround is too unlikely and/or the needed resources are not available; unlikely and/or the needed resources are not available;

(b)(b) Whether the confirmation of a plan of reorganization is too unlikely Whether the confirmation of a plan of reorganization is too unlikely and/or the needed resources are not available; and/or the needed resources are not available;

(c)(c) Whether a sale as a going concern or a sale of grouped assets have Whether a sale as a going concern or a sale of grouped assets have strategic value; orstrategic value; or

(d)(d) Whether there is a specter of “deepening insolvency.”Whether there is a specter of “deepening insolvency.”


WhoWho Decides to Sell? Decides to Sell?

(a)(a) The bank / other secured creditors; The bank / other secured creditors;

(b)(b) The CRO and the company’s other professionals; The CRO and the company’s other professionals;

(c)(c) The board of directors and officers; The board of directors and officers;

(d)(d) The stockholders; orThe stockholders; or

(e)(e) The unsecured creditors.The unsecured creditors.


HowHow Should the Company Sell Assets? Should the Company Sell Assets?

(a)(a) By a secured party sale;By a secured party sale;

(b)(b) By an assignment for the benefit of creditors; By an assignment for the benefit of creditors;

(c)(c) By a state court receivership;By a state court receivership;

(d)(d) Through a trust mortgage; orThrough a trust mortgage; or

(e)(e) By a bankruptcy sale (under section 363 or through a plan).By a bankruptcy sale (under section 363 or through a plan).


What ProfessionalsWhat Professionals Should the Should the Company Hire?Company Hire?

(a)(a) A CRO;A CRO;

(b)(b) An Investment Banker; An Investment Banker;

(c)(c) A financial consultant;A financial consultant;

(d)(d) A bankruptcy lawyer; orA bankruptcy lawyer; or

(e)(e) All of the above.All of the above.


Preparing Management and Preparing Management and

the Company for the Salethe Company for the Sale



If a Company Makes the Decision to If a Company Makes the Decision to Sell its Assets in a Bankruptcy Sell its Assets in a Bankruptcy

Process, What Threshold Decisions Process, What Threshold Decisions Should it Make About Potential Should it Make About Potential

Buyers?Buyers?

(a)(a) It should consider It should consider whowho should be invited to undertake due should be invited to undertake due diligence; diligence;

(b)(b) It should consider It should consider what qualificationswhat qualifications potential buyers must potential buyers must satisfy in order to undertake diligence; satisfy in order to undertake diligence;

(c)(c) It should consider It should consider what restrictionswhat restrictions are appropriate on the future are appropriate on the future behavior of buyers in consideration of the opportunity to behavior of buyers in consideration of the opportunity to undertake due diligence; orundertake due diligence; or

(d)(d) It should let any interested party undertake due diligence.It should let any interested party undertake due diligence.


What Attributes Should a Potential What Attributes Should a Potential Buyer Show to Establish Itself as a Buyer Show to Establish Itself as a

“Qualified Bidder”?“Qualified Bidder”?

(a)(a) If the buyer is a financial sponsor:If the buyer is a financial sponsor:

- A description of the fund;- A description of the fund;

- “Dry gun powder” i.e. room in the fund to make any equity portion of the - “Dry gun powder” i.e. room in the fund to make any equity portion of the investment; investment;

- Previous investments, type of securities.- Previous investments, type of securities.

(b)(b) If the buyer is a strategic buyer:If the buyer is a strategic buyer:

- Its business situation;- Its business situation;

- Whether there is cash on the balance sheet or availability under existing - Whether there is cash on the balance sheet or availability under existing credit arrangements; credit arrangements;

- Its access to capital markets.- Its access to capital markets.

(c)(c) Any interested bidder should be allowed to participate.Any interested bidder should be allowed to participate.


What Limits are Appropriate on the What Limits are Appropriate on the Future Behavior of Potential Buyers in Future Behavior of Potential Buyers in

Exchange for the Opportunity to Exchange for the Opportunity to Undertake Due Diligence?Undertake Due Diligence?

(a)(a) No limits should be imposed; doing so might “chill” the bidding process No limits should be imposed; doing so might “chill” the bidding process and would be inconsistent with the goal of maximizing value for creditors; and would be inconsistent with the goal of maximizing value for creditors;

(b)(b) The Company may require potential buyers to sign non-disclosure The Company may require potential buyers to sign non-disclosure agreements and non-solicitation agreements; agreements and non-solicitation agreements;

(c)(c) The Company may limit potential buyers’ rights to trade claims against The Company may limit potential buyers’ rights to trade claims against and securities of the Company; orand securities of the Company; or

(d)(d) The Company may limit potential buyers’ right to form joint ventures or The Company may limit potential buyers’ right to form joint ventures or other arrangements between or among potential bidders.other arrangements between or among potential bidders.


Once the Universe of Potential Once the Universe of Potential Buyers has been Defined, Which of Buyers has been Defined, Which of the Following is the Best Method the Following is the Best Method

for the Company to Provide for the Company to Provide Information to those Buyers?Information to those Buyers?

(a)(a) Hard copies of materials and physical war rooms;Hard copies of materials and physical war rooms;

(b)(b) Electronic data rooms; Electronic data rooms;

(c)(c) Management presentations; or Management presentations; or

(d)(d) All of the above.All of the above.


Confidentiality Issues May Arise as Confidentiality Issues May Arise as Proprietary and Trade Secret Proprietary and Trade Secret

Information is Disclosed. Which of the Information is Disclosed. Which of the Following Techniques Would make Following Techniques Would make Sense to Manage These Concerns?Sense to Manage These Concerns?

(a)(a) The company should assume that all bidders are honorable; they The company should assume that all bidders are honorable; they would would never consider diverting any information obtained during the never consider diverting any information obtained during the

diligence process to their competitive advantage;diligence process to their competitive advantage;

(b)(b) All bidders should sign confidentiality/nondisclosure agreements; All bidders should sign confidentiality/nondisclosure agreements;

(c)(c) The company should consider taking additional steps such as staging The company should consider taking additional steps such as staging disclosure when the buyer is also a competitor; ordisclosure when the buyer is also a competitor; or

(d)(d) The company should not share any proprietary information until the The company should not share any proprietary information until the closing.closing.


Structuring the Terms of SaleStructuring the Terms of Sale



What Protections May be Requested by What Protections May be Requested by a Potential Stalking Horse or Offered a Potential Stalking Horse or Offered by a Company to Induce the Stalking by a Company to Induce the Stalking

Horse to Submit a Binding Offer?Horse to Submit a Binding Offer?

(a)(a) Break-up fees, expense reimbursement fees, and topping fees; Break-up fees, expense reimbursement fees, and topping fees;

(b)(b) Minimum overbid requirements; Minimum overbid requirements;

(c)(c) Provisions for deposits; Provisions for deposits;

(d)(d) Window shop provisions; orWindow shop provisions; or

(e)(e) None of the above.None of the above.


Is Court Approval of Bidding Procedures Is Court Approval of Bidding Procedures Necessary?Necessary?

(a)(a) Court approval should always be sought as soon as possible after execution Court approval should always be sought as soon as possible after execution of the APA and long before the hearing on a sale;of the APA and long before the hearing on a sale;

(b)(b) Court approval should always be sought, but the parties can have the court Court approval should always be sought, but the parties can have the court consider whether to approve bidding procedures at the hearing on a sale; orconsider whether to approve bidding procedures at the hearing on a sale; or

(c)(c) Court approval is not necessary – it is a simple matter of contract between Court approval is not necessary – it is a simple matter of contract between the company and stalking horse.the company and stalking horse.


Which of the Following Tests Have Which of the Following Tests Have Courts Used to Evaluate Proposed Courts Used to Evaluate Proposed

Bidding Incentives?Bidding Incentives?

(a)(a) Whether the interests of all concerned parties are best served by the Whether the interests of all concerned parties are best served by the incentives; incentives;

(b)(b) “No objection, no problem”; “No objection, no problem”;

(c)(c) The business judgment rule; orThe business judgment rule; or

(d)(d) Whether break up fees are necessary to enhance the estate.Whether break up fees are necessary to enhance the estate.


What Type of Payment Priority Should What Type of Payment Priority Should be Given for Break-Up and other be Given for Break-Up and other

Bidding Fees?Bidding Fees?

(a)(a) Super-Administrative priority;Super-Administrative priority;

(b)(b) Administrative priority; Administrative priority;

(c)(c) These payments should be secured by a lien or escrow; orThese payments should be secured by a lien or escrow; or

(d)(d) No priority is necessary so long as the fees are approved by the court.No priority is necessary so long as the fees are approved by the court.


What Other Structure Elements Should What Other Structure Elements Should Also be Considered?Also be Considered?

(a)(a) Contract rights to approve the substance and form of all documents Contract rights to approve the substance and form of all documents (including (including the form of proposed sale order); the form of proposed sale order);

(b)(b) Conditions to closing (such as the entry of an acceptable sale order, or the Conditions to closing (such as the entry of an acceptable sale order, or the assignment of certain executory contracts that are critical to the transaction); assignment of certain executory contracts that are critical to the transaction);

(c)(c) Time limitations to meet specific milestones; orTime limitations to meet specific milestones; or

(d)(d) Representations and warranties.Representations and warranties.


Which of the Following Statements is Which of the Following Statements is Most True About Representations and Most True About Representations and

Warranties in a Section 363 Sale?Warranties in a Section 363 Sale?

(a)(a) They are never available. Everyone knows bankruptcy sales are They are never available. Everyone knows bankruptcy sales are “where is” and “as is”;“where is” and “as is”;

(b)(b) When available, they have the potential to be less useful than in a non-When available, they have the potential to be less useful than in a non-bankruptcy context; orbankruptcy context; or

(c)(c) They are often less important than they would be in nonbankruptcy sales.They are often less important than they would be in nonbankruptcy sales.


Managing the Sale ProcessManaging the Sale Process



Which of the Following Elements Which of the Following Elements Should the Company Consider to Should the Company Consider to

Set the Timeline and Rules of Set the Timeline and Rules of Engagement?Engagement?

(a)(a) How bidding procedures may affect the timeline;How bidding procedures may affect the timeline;

(b)(b) Notice requirements; Notice requirements;

(c)(c) The need to balance the prospects of a comprehensive sale process The need to balance the prospects of a comprehensive sale process against the likelihood that a nervous secured creditor will be against the likelihood that a nervous secured creditor will be unwilling to fund a protracted sale process; orunwilling to fund a protracted sale process; or

(d)(d) The distraction of management and the added duties the sale The distraction of management and the added duties the sale process requires of critical personnel.process requires of critical personnel.


Which of the Following is a Worthy Which of the Following is a Worthy Gate-Keeping Requirement Regarding Gate-Keeping Requirement Regarding

Competing Offers?Competing Offers?

(a)(a) The Seller should indicate to parties that one factor will be the similarity of The Seller should indicate to parties that one factor will be the similarity of the offer to the stalking horse bid; the offer to the stalking horse bid;

(b)(b) Bidders should be required to make deposits;Bidders should be required to make deposits;

(c)(c) The company should consider using a standard contract that buyers can bid The company should consider using a standard contract that buyers can bid against; oragainst; or



What Auction Procedures and Logistics What Auction Procedures and Logistics Should a Company Consider to Should a Company Consider to

Complete an Asset Sale?Complete an Asset Sale?

(a)(a) Whether to use an open outcry or sealed bids format;Whether to use an open outcry or sealed bids format;

(b)(b) Whether to have the auction conducted by the court, an auctioneer or Whether to have the auction conducted by the court, an auctioneer or the debtor-in-possession; the debtor-in-possession;

(c)(c) Feeding the auction and other issues regarding the auction setting; orFeeding the auction and other issues regarding the auction setting; or

(d)(d) Whether to have an on-site auction, a caravan style auction, an auction at Whether to have an on-site auction, a caravan style auction, an auction at the courthouse or an auction at a neutral location.the courthouse or an auction at a neutral location.


Third Party IssuesThird Party Issues



Bankruptcy Code Section 363(f) Bankruptcy Code Section 363(f) Sometimes Permits Sales of Assets Sometimes Permits Sales of Assets

Free and Clear of “Interests” in Free and Clear of “Interests” in Property. For Purposes of an Asset Property. For Purposes of an Asset Sale and Section 363(f), What is an Sale and Section 363(f), What is an

“Interest”?“Interest”?

(a)(a) A claim;A claim;

(b)(b) A lien; A lien;

(c)(c) Any encumbrance; orAny encumbrance; or

(d)(d) anything connected to or arising from the property.anything connected to or arising from the property.


In Which of the Following In Which of the Following Circumstances Would a Court be Likely Circumstances Would a Court be Likely

to Approve a Sale Free and Clear of to Approve a Sale Free and Clear of “Interests” Under Section 363(f) ?“Interests” Under Section 363(f) ?

(a)(a) When applicable non-bankruptcy law permits such sales;When applicable non-bankruptcy law permits such sales;

(b)(b) When the holder of the interest consents;When the holder of the interest consents;

(c)(c) When the interest is a lien and the price at which the property is to be sold When the interest is a lien and the price at which the property is to be sold is greater than the aggregate value of all liens on such property; oris greater than the aggregate value of all liens on such property; or

(d)(d) The interest is in The interest is in bona fidebona fide dispute. dispute.


If a Bankruptcy Court Approves a If a Bankruptcy Court Approves a Sale of Assets, is the Buyer Open to Sale of Assets, is the Buyer Open to

Successor Liability Claims?Successor Liability Claims?

(a)(a) Yes. Any buyer will be an all but defenseless target for claims by Yes. Any buyer will be an all but defenseless target for claims by parties who dealt with or were injured by the seller or its products parties who dealt with or were injured by the seller or its products or actions;or actions;

(b)(b) Courts generally will protect asset purchasers from at least Courts generally will protect asset purchasers from at least successor liability claims based on present injuries if the claimant successor liability claims based on present injuries if the claimant had notice of the bankruptcy sale and either participated in the had notice of the bankruptcy sale and either participated in the bankruptcy case or had the opportunity to do so; bankruptcy case or had the opportunity to do so;

(c)(c) Courts will never protect asset purchasers from future claims; orCourts will never protect asset purchasers from future claims; or

(d)(d) The sale order will shield the buyer from any successor liability The sale order will shield the buyer from any successor liability claims.claims.


How will the Court Treat a Request to How will the Court Treat a Request to Assign Executory Contacts that the Assign Executory Contacts that the

Buyer would like to Acquire?Buyer would like to Acquire?

(a)(a) An executory contract cannot be assigned if it has an antiassignment clause, An executory contract cannot be assigned if it has an antiassignment clause, unless the counterparty consents; unless the counterparty consents;

(b)(b) Any executory contract can be assigned, as long as all defaults are “cured”; Any executory contract can be assigned, as long as all defaults are “cured”;

(c)(c) While most contracts can be assigned despite restrictions on assignment While most contracts can be assigned despite restrictions on assignment that may be found in the agreement, some contracts can never be assigned that may be found in the agreement, some contracts can never be assigned unless the counterparty consents; orunless the counterparty consents; or

(d)(d) An executory contract can be assigned only if there is adequate assurance of An executory contract can be assigned only if there is adequate assurance of future performance.future performance.


Preserving Value Pending the Sale /Preserving Value Pending the Sale /

Planning for Post Sale IssuesPlanning for Post Sale Issues



Which of the Following are Issues that Which of the Following are Issues that the Company Should Consider to the Company Should Consider to

Preserve Asset Value Until the Sale Preserve Asset Value Until the Sale Closes?Closes?

(a)(a) There are no such issues. Since the decision to sell has been made, it is There are no such issues. Since the decision to sell has been made, it is for the buyer to sort out and address these issues;for the buyer to sort out and address these issues;

(b)(b) What customer and vendor relationships must be preserved; What customer and vendor relationships must be preserved;

(c)(c) What I.P. assets must be preserved – and how should company What I.P. assets must be preserved – and how should company knowledge be transferred;knowledge be transferred;

(d)(d) What steps should the company take to retain key employees; orWhat steps should the company take to retain key employees; or

(e)(e) What key expenses should be maintained during the sale process.What key expenses should be maintained during the sale process.


Which of the Following Expenses Which of the Following Expenses Should be Maintained Pending a Sale?Should be Maintained Pending a Sale?

(a)(a) Insurance payments; Insurance payments;

(b)(b) Payments for licenses and permits; Payments for licenses and permits;

(c)(c) Required maintenance; orRequired maintenance; or

(d)(d) Post petition administrative expenses only.Post petition administrative expenses only.


How Should a Company Approach How Should a Company Approach Customer and Vendor Relationships Customer and Vendor Relationships

During the Sale Process?During the Sale Process?

(a)(a) Critical vendors must be identified, and the seller must ensure that post-Critical vendors must be identified, and the seller must ensure that post-petition payments are timely made to this group; petition payments are timely made to this group;

(b)(b) The company might consider assuming any contracts with critical vendors;The company might consider assuming any contracts with critical vendors;

(c)(c) Depending on the situation, the seller should communicate the sale process Depending on the situation, the seller should communicate the sale process to customers and ensure that service will not be interrupted by the to customers and ensure that service will not be interrupted by the transaction; ortransaction; or

(d)(d) Any deterioration of customer relationships could mean that Any deterioration of customer relationships could mean that there is no business to sell.there is no business to sell.


Which of the Following Considerations Which of the Following Considerations Should the Company Account for With Should the Company Account for With Respect to Key Employees During the Respect to Key Employees During the

Sale Process?Sale Process?

(a)(a) A key employee retention plan (“KERP”);A key employee retention plan (“KERP”);

(b)(b) An accommodation for those employees that have contributed deferred An accommodation for those employees that have contributed deferred compensation into a “Rabbi Trust”;compensation into a “Rabbi Trust”;

(c)(c) Interim service agreements to retain key employees to facilitate the Interim service agreements to retain key employees to facilitate the transfer of critical information.transfer of critical information.


Which of the Following Special Issues Which of the Following Special Issues May Arise When the Assets Include May Arise When the Assets Include

“Intellectual Property”?“Intellectual Property”?

(a)(a) The company should determine the time it will take to transfer know-how The company should determine the time it will take to transfer know-how to the buyer;to the buyer;

(b)(b) The company should determine a process to transfer key intellectual The company should determine a process to transfer key intellectual property; property;

(c)(c) The company should ensure that senior employees are involved in the The company should ensure that senior employees are involved in the process to prevent damage to the intellectual property; orprocess to prevent damage to the intellectual property; or



Other Strategic IssuesOther Strategic Issues

Richard E. Mikels Richard E. Mikels ѩѩ Howard Brod Brownstein Howard Brod Brownstein ѩѩ Andy Grasier Andy Grasier ѩѩ Carmen H. Lonstein Carmen H. Lonstein ѩѩ Benjamin L. Nortman Benjamin L. Nortman ѩѩ David Peress David Peress ѩѩ Lisa M. PoulinLisa M. Poulin


If a Sale is Completed Under Section If a Sale is Completed Under Section 363(f), Does the Buyer Have to Pay 363(f), Does the Buyer Have to Pay

any Transfer Taxes?any Transfer Taxes?

(a)(a) If tax payments are not required by the order that approves the sale, the If tax payments are not required by the order that approves the sale, the buyer does not have to pay them;buyer does not have to pay them;

(b)(b) Section 1146(c) may exempt transfers under a plan from specific transfer Section 1146(c) may exempt transfers under a plan from specific transfer taxes, but not under a transfer under Section 363; ortaxes, but not under a transfer under Section 363; or

(c)(c) Case law is divided as to what transfers are “under a plan” within the Case law is divided as to what transfers are “under a plan” within the meaning of Section 1146(c).meaning of Section 1146(c).


In the Asset Sale Context, What is a In the Asset Sale Context, What is a “Party-in-Interest”?“Party-in-Interest”?

(a)(a) Tonight’s Final Night Gala and Concert;Tonight’s Final Night Gala and Concert;

(b)(b) Any disgruntled or frustrated suitor for assets;Any disgruntled or frustrated suitor for assets;

(c)(c) The debtor, any trustee, a committee, a creditor, and equity security The debtor, any trustee, a committee, a creditor, and equity security holder or an indenture trustee; orholder or an indenture trustee; or

(d)(d) For purposes of an appeal, only a “person aggrieved.”For purposes of an appeal, only a “person aggrieved.”


What is a “Good Faith” Purchaser for What is a “Good Faith” Purchaser for Purposes of Section 363(m) of the Purposes of Section 363(m) of the

Bankruptcy Code?Bankruptcy Code?

(a)(a) All buyers are presumed to act in good faith;All buyers are presumed to act in good faith;

(b)(b) Only buyers that meet exacting requirements can qualify as “good faith Only buyers that meet exacting requirements can qualify as “good faith purchasers”; orpurchasers”; or

(c)(c) While there is no specific definition, a good faith purchaser is some one While there is no specific definition, a good faith purchaser is some one who, at a minimum, engaged in a transaction untainted by fraud.who, at a minimum, engaged in a transaction untainted by fraud.


When Should the Court Waive the 10-When Should the Court Waive the 10-day Stay Provided by Rules 6004 and day Stay Provided by Rules 6004 and

6006?6006?

(a)(a) Whenever a party has objected to the sale at the sale confirmation Whenever a party has objected to the sale at the sale confirmation hearing, and has announced its intent to appeal, jeopardizing a sale hearing, and has announced its intent to appeal, jeopardizing a sale

everyone has worked so hard to complete;everyone has worked so hard to complete;

(b)(b) When no one has objected to the sale; or When no one has objected to the sale; or

(c)(c) Where objections to the sale have been filed, but the court Where objections to the sale have been filed, but the court has has overruled all objections and the court finds that the objecting overruled all objections and the court finds that the objecting parties’ parties’ interests can otherwise be protected.interests can otherwise be protected.


Should a Court Ever Consider a Late Should a Court Ever Consider a Late Bid?Bid?

(a)(a) Absolutely not! Its just not fair to everyone else;Absolutely not! Its just not fair to everyone else;

(b)(b) Always; the Debtor has an absolute obligation to maximize Always; the Debtor has an absolute obligation to maximize value so bids should always be considered until the sale order is entered; value so bids should always be considered until the sale order is entered;

(c)(c) There may be circumstances where a late bid is appropriate, including There may be circumstances where a late bid is appropriate, including where the price is grossly inadequate; or where the price is grossly inadequate; or

(d)(d) Only if accepting a late bid would not unduly frustrate participants’ Only if accepting a late bid would not unduly frustrate participants’ expectations.expectations.


Sales and Transfers Pursuant to Plans Sales and Transfers Pursuant to Plans of Reorganizationof Reorganization



Which of the Following is a Reason to Which of the Following is a Reason to Consider a Plan as an Alternative Way Consider a Plan as an Alternative Way

to Complete an Asset Sale?to Complete an Asset Sale?

(a)(a) The buyer is interested in using an acquisition tool that involves a direct The buyer is interested in using an acquisition tool that involves a direct merger or consolidation, or the consideration involves assets besides merger or consolidation, or the consideration involves assets besides cash (e.g. securities);cash (e.g. securities);

(b)(b) A plan may give better protection against successor liability claims; A plan may give better protection against successor liability claims;

(c)(c) A plan is a better vehicle to permit sales of all assets; orA plan is a better vehicle to permit sales of all assets; or

(d)(d) The plan may be the only option to sell assets that are encumbered by The plan may be the only option to sell assets that are encumbered by liens.liens.


Can a Plan be Used to Initiate a Hostile Can a Plan be Used to Initiate a Hostile Acquisition Strategy?Acquisition Strategy?

(a)(a) Never; Never;

(b)(b) Only if the debtor no longer has the exclusive right to propose a plan; Only if the debtor no longer has the exclusive right to propose a plan;

(c)(c) Only if the suitor has (or has acquired) standing to propose a competing Only if the suitor has (or has acquired) standing to propose a competing plan; orplan; or

(d)(d) The bankruptcy code permits a potential buyer to file a plan as part of a The bankruptcy code permits a potential buyer to file a plan as part of a hostile acquisition strategy at any time.hostile acquisition strategy at any time.

Date post:	25-May-2015
Category:	Documents
Upload:	jacknickelson
View:	338 times
Download:	0 times

"Getting the Deal Done": Asset Sales in Bankruptcy Proceedings

Documents