Insolvent or nearly insolvent companies can present an attractive opportunity to purchase assets on the cheap, or at least at a significantly reduced cost. Of course, a buyer purchasing assets from a troubled company wants to be as sure as possible that it is buying only the target’s assets – and not also taking on all of the troubled company’s liabilities. This kind of specialized M&A deal raises issues that usually don’t come up when acquiring a solvent company and that aren’t always obvious at first.
Several different strategies exist for balancing these risks with the potentially substantial rewards of a distressed asset acquisition. Here is an overview of these issues. A more extensive discussion focusing in particular on intellectual property assets, written by Cooley Godward intellectual property partner Gary Moore, can be found here.
Bob Eisenbach
Listed in The Best Lawyers in America® for Bankruptcy and Creditor-Debtor Rights Law, and recognized as one of Northern California’s Super Lawyers®, Bob focuses his practice on restructuring, bankruptcy, distressed M&A, and related litigation. He is regularly involved in cases throughout the country, including California, Delaware, and New York.