Acquisition of Distressed Businesses and Assets

Distressed companies and assets often present appealing investment opportunities for strategic and financial buyers alike. However, the acquisition of a distressed company often raises a host of legal and business risks that are not typically found in the acquisition of a healthy, solvent company. These risks include, but are not limited to, unwitting acquisition of the target company's business obligations, fraudulent transfer liability and potential successor liability. Some acquisition methods are designed to reduce legal liability, but they are typically more expensive and require the potential acquirer to assume execution risks. Therefore, potential purchasers must be aware of the legal and strategic advantages and disadvantages that are inherent in each method of acquiring distressed companies.

Wayne H. Davis  and Michael J. Riela, who are partners in the Creditors' Rights and Business Reorganization practice group at the law firm of Tannenbaum Helpern Syracuse & Hirschtritt LLP, will discuss the most prevalent ways of acquiring distressed companies and assets, and the advantages and disadvantages of each. Wayne and Michael will discuss business considerations, as well the relevant legal issues.

Learning Objectives: 

1. Identify the legal and strategic advantages and disadvantages of various methods of acquiring distressed companies

2. Grasp the process of traditional M&A
3. Understand bankruptcy sales under Bankruptcy Code Section 363 as well as under a Chapter 11 Plan
4. Recognize the advantages and disadvantages of "Loan to Own" investments
5. Address the advantages and disadvantages of foreclosures