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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.