Suzzanne Uhland on Distressed Asset Sales

Suzzanne Uhland on

Distressed Asset SalesBy Suzzanne Uhland

Introduction

A partner in O’Melveny and Myers,

LLP’s California offices, Suzzanne

Uhland focuses on chapter 11

bankruptcy proceedings and sales of

companies’ distressed assets.

Suzzanne Uhland also advises clients

on out-of-court proceedings and has

considerable experience in litigation

connected to insolvency.

About Distressed Assets

A distressed asset is one that an owner must sell, often at a loss, because of bankruptcy or other financial reasons. The sale of distressed assets can take place out of court. This allows sellers to finalize the sale quickly and get a better price than court-mandated auctions. Buyers have to consider several possibilities. For example, the sale may require the consent of lenders to obtain a clear title. If the seller is a public company, shareholders must agree to the sale. Also, the sale may be "as-is"; if the seller ceases business after the sale, warranties or other representations may not be upheld.

Conclusion

In addition, if the seller is financially

insolvent and sells the assets for less

than reasonable equivalent value, the

seller must be prepared to build a

strong case for the values assigned to

the assets, in order to avoid

accusations of fraudulent conveyance.