Asset Sales Committee

ABI Committee News

2004 Winter Leadership Conference

The Asset Sales Committee will meet on Friday, Dec. 3, at the 2004 Winter Leadership Conference. The committee will present Aggressive Acquisition Strategies: Risks and Rewards of §363 Asset Purchases. The panel will discuss claims purchases, standing, and limits on credit bidding by secured creditors. Buyer alliances with management/insiders and obtaining support from creditor constituencies also will be covered. Terminating plan exclusivity, proposing competing plans and the use of pre-packaged plans to eliminate competitive bidding will be reviewed, and limits on the court’s jurisdiction, manipulation of the claims objection.

Representing the Buyer in an Acquisition from a Chapter 11 Debtor—What if There Is Not a Willing Seller?

Holland & Knight, LLP

Presented at the 2004 Northeast Bankruptcy Conference.

The commencement of a Chapter 11 case by a middle market company is rarely a surprise to its competitors. Industry rumor, accounting firm watch lists, published debt instrument rating downgrades, investment banker target lists and financial advisor scoring systems contribute to wide knowledge of financial distress fairly early in the process. Some of the identified distressed companies will be viewed by the industry as lost causes to be watched as they crash, others will be identified as targets, whether or not the distressed companies believe themselves to be for sale. So, when one of those competitors of a distressed company comes to you and asks, “how do I acquire the company that just filed Chapter 11,” what’s next?

Read the full article.

Section 363 and the Path to World Domination: Can All Be Achieved in the Sale Motion?

While Chapter 11 generally focuses on the reorganization and ongoing operations of a debtor’s business, the debtor’s restructuring may be accomplished by any number of means, including the sale of all or part of the debtor’s assets pursuant to a liquidating or reorganizing plan of reorganization, a sale outside of a plan under §363, or some combination of the two.

These materials discuss the statutory and judicially established framework for sales under §363; advanced issues relating to such sales (including discussion of a few “pushing the envelope” strategies); and a comparison of sales through §363 to plan sales.

Read the full article.

Presented at the 2004 Southwest Bankruptcy Conference.

Going Once…Going Twice…Sold (Again)

Asset sales pursuant to 11 U.S.C. §363(b)(1) may be conducted either by private sale or public auction. Many debtors choose the latter option, hoping that competitive bidding will result in a higher purchase price. Auctions also allow a debtor to demonstrate to the bankruptcy court and its creditors that it obtained the highest and best price in the market for its assets.

But what happens when the debtor discovers that a subsequent bidder is willing to pay more for the debtor’s assets than the price obtained at auction? In Corporate Assets Inc. v. Paloian, 368 F.3d 761 (7th Cir. 2004), the Seventh Circuit attempts to answer that question.

Read the full article.

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