Companies facing financial difficulties face three options: flog, fix or fail (close). Often a restructuring will involve a mixture of both debt restructuring accompanied by a sale of part or, occasionally, all of the business. M&A is a challenging process in normal conditions; however, selling a business in a distressed scenario is fraught with difficulty and presents a raft of challenges over and above a sale in the ordinary course. In an ideal world the sellers will seek to execute a sale outside and before any formal insolvency process (Administration) however, in some cases this may not be possible. The programme focuses on the challenges of selling a business both before the imposition of a formal insolvency process and also after Administration via a pre-packages sale. Interestingly pre-packs have been used in jurisdictions other than the UK; namely Holland, Luxembourg and Germany.
This distressed disposals training course aims to identify the typical issues which parties are likely to encounter in the process and provides a route map on how these might be resolved.
The programme adopts a generic approach which is relevant to stakeholders who may have an interest in these types of transactions including; lawyers, financial advisers, senior and junior lenders, accountants and owners.
The problems typically include the nature of the sale process, the structure of the deal and the manner in which the consideration is to be paid (deferred methods are unattractive at best). For the buyer problems arise through the absence of warranties coupled with the limited due diligence which is conducted owing to timing pressures. In addition, the sale is also open to a number of additional impediments not present in more normal circumstances; attempts by (competing/trade) buyers to wind down the clock, difficulties with valuing the target if that is itself distressed, the ever-present risk of Directors’ fiduciary duties which become more relevant in distress.