May 10, 2019

Distressed M&A: A Comprehensive Outline of Acquisition Strategies

Buying distressed companies, whether through bankruptcy or otherwise, presents some unique challenges – as well as some unique opportunities.  This 233-page Wachtell outline provides a comprehensive an overview of alternative methods for acquiring distressed businesses.

Topics addressed include typical corporate responses to debt crises, as well as the various issues associated with out-of-court, hybrid & bankruptcy acquisition strategies, and with acquiring & trading claims in distressed companies.  Here’s an excerpt from the introduction:

Distressed companies can represent attractive acquisition targets. Their stock and their debt often trade at prices reflecting the difficulties they face, and they may be under pressure to sell assets or securities quickly to raise capital or pay down debt. Accordingly, prospective acquirors may have an opportunity to acquire attractive assets or securities at a favorable price. This outline considers how best to acquire a distressed company from every possible point of entry, whether that consists of buying existing or newly issued stock, merging with the target, buying assets, or buying existing debt in the hope that it converts into ownership.

For many M&A lawyers, the world of distressed acquisitions is much different from the one they’re used to operating in – and this outline is a very valuable resource to have at your side when trying to navigate it.

John Jenkins