3

Steps Leading to the Purchase of Assets Under the Bankruptcy Code

Embed Size (px)

Citation preview

Page 1: Steps Leading to the Purchase of Assets Under the Bankruptcy Code
Page 2: Steps Leading to the Purchase of Assets Under the Bankruptcy Code

Suzzanne Uhland is a O'Melveny & Myers, LLP, partner who holds Restructuring Practice Chair and Policy Committee membership and sits on the firm’s National Advisory Board. Suzzanne Uhland coordinates with in-house transactional attorneys in facilitating distressed sales and acquisitions, as well as Chapter 11 reorganizations. Those who purchase assets from a bankrupt entity typically do so under section 363 of the Bankruptcy Code. This process involves submitting a term sheet to the debtor, undertaking due diligence, negotiating the term sheet, and drafting an asset purchase agreement and sale procedures order.

Page 3: Steps Leading to the Purchase of Assets Under the Bankruptcy Code

Once these steps have been completed, the court holds a sale procedures order hearing. At this juncture, interested parties such as creditors are able to appear and voice objections and comments pertaining to the order and agreement. Once the sale procedures order has been approved, the auction process is initiated, with the first-mover’s bid registered as the “stalking horse” bid. The asset purchase agreement is bound to this initial bid and another hearing is scheduled within 60 days to either hold the auction or approve auction results.