Buying a Distressed Business: Ten Tips For Entrepreneurs

I remember post-“9/11” working at a major law firm in New York City and watching all of the transactions on my plate fall apart.  Indeed, then (like now), as credit dried-up, the M&A pendulum swung to the acquisition of distressed (i.e., financially-troubled) companies; however, as I learned first-hand, acquiring a distressed company raises a host of significant risks and potential problems that are not typically found in the acquisition of a healthy, solvent company (which I recently discussed here).  Below are ten tips for entrepreneurs who are looking to get into the distressed M&A game.  They relate to two different contexts: (i) prior to (or absent) a distressed target’s Chapter 11 filing — i.e., the non-bankruptcy context; and (ii) after a distressed target’s Chapter 11 filing — i.e., the bankruptcy context. (more…)

Tags: bankruptcy, chapter 11, distressed business, distressed company, distressed M&A, fraudulent conveyance, M&A, pre-pack, prepackaged bankruptcy, Section 363 sale, stalking horse
Posted in M&A Issues, Restructuring Issues | 6 Comments »