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ABI Journal

Asset Sales

Rethinking the Asset Sale

This panel focuses on emerging tools that can be used in auctions and sale processes, including the use of social media and other technology.

Co-Chairs Corner and a Look Ahead at Asset Sales

As we navigate 2025, we anticipate that distressed asset sales will continue to gain momentum. The current economic landscape has created both challenges and opportunities for businesses, making M&A and asset sales a prominent strategy for companies looking to restructure, grow, or acquire valuable assets at a lower cost.

This “Look Ahead” edition of the ABI Asset Sales Committee’s newsletter will share some insights and perspectives on what we can expect in the coming year.

Liability Management Transactions: The Beginning of the End?

While corporate restructuring is an option financially distressed companies often proactively explore to reduce their debt burden, another alternative that has recently gained some notoriety is a liability management transaction (LMT). Put simply, an LMT is a seemingly clever maneuver to modify capital structures by shifting collateral around to benefit one set of creditors at the expense of others. This assists the company with fresh capital, suspended/waived debt service obligations, extended maturities, or some combination thereof.

Tips for Selling a Distressed Business

When a business is in financial trouble, sometimes the best way out is to sell the business as some form of a going concern. Such a sale usually yields more than a piecemeal liquidation of the assets. Losses to creditors are minimized, as are losses to guarantors of debt.

Usually, rather than undertaking a distressed sale, it is better to turn a business around so that it is more profitable and will either sell more or generate cash to pay creditors. However, selling is necessary when that option is not viable, particularly in the eyes of secured lenders.

Beware the Backdoor Release: Big Lots’ Attempt to Dispose of Estate Claims Via § 363 Reminds Creditors to Scrutinize Asset-Purchase Agreements

In late 2024, struggling retailer and chapter 11 debtor Big Lots Inc. and its debtor affiliates (together, “Big Lots” or the “debtors”) attempted a § 363 sale of substantially all of their assets to an entity affiliated with Nexus Capital Management LP.

Going to a Bankruptcy Auction Naked: Stalking-Horse Strategies to Maximize Auction Proceeds

In the realm of bankruptcy auctions, the goal is to maximize proceeds for stakeholders through a process that is transparent and beyond reproach. This article discusses strategies for running a pre-auction process to choose a stalking horse, ensuring that no stone is left unturned in the pursuit of maximizing value.

Seventh Annual ABI Asset Sale of the Year Award Information

Nomination Deadline: February 28, 2025

Criteria

  • Completion of a distressed sale (in or outside of court via § 363, a plan, an assignment for benefit of creditors, Article 9, receivership, etc.) that was strategic and provided stakeholders with value (“Sale”);
  • A display of excellence across the full spectrum of the Sale process, from the initial targeting through pursuit, structuring and financing, to completion of a transaction;

Reverse Vesting Orders: The Most Powerful Tool You’ve Never Heard Of

Several U.S. bankruptcy courts recently have recognized CCAA reverse vesting orders in chapter 15 cases, but not without some reservations as to their breadth and effect. This panel will discuss the use of reverse vesting orders to effect asset sales in cross-border transactions.