Purchase and Sale of Distressed Assets

Often, the best solution for an underperforming company is a sale of assets. The challenge is to achieve the asset transfer at a ‘going concern’ price while avoiding imposition of successor liability on the purchaser for debts of the seller (other than those assumed). Either Article 9 of the Uniform Commercial Code and Section 363 of the Bankruptcy Code can be utilized to achieve this goal, thereby protecting purchasers’ returns on acquisitions of distressed assets.

Affinity has also worked on structuring asset sales and spinoffs to withstand challenge as fraudulent transfers, and has litigated such matters.

Illustrative representations, in addition to distressed asset sales referenced in Distressed Company Representations, include:

  • Representation of principals of an importer in forming a new company and structuring the acquisition of the importer’s assets in Chapter 11; free and clear of all liens, claims and encumbrances, including  anti-dumping law liability. Methods of limiting liability in such “distressed” asset sales include utilizing Article 9 of the Uniform Commercial Code or Section 363 of the Bankruptcy Code. Affinity Law Group has substantial experience with both methods.
  • Advising a large publicly traded company regarding sale of assets and potential attack as a fraudulent transfer.
  • Advising a large publicly traded parent company regarding threatened avoidance action regarding the spinoff of certain assets.

Affinity Law Group attorney with this focus area:

Tal Sant