Distressed Sales And Purchases
Our solicitors are vastly experienced in assisting companies of all sizes to facilitate and advise upon the sales process of a distressed business. At Blackstone Solicitors, we are able to advise many different types of client, no matter the complexity of the deal.
For more information about how our team of corporate solicitors can help you with the sale or purchase of a distressed business, contact us on 0345 901 0445 or complete our online enquiry form and a member of the team will call you back at a convenient time.
A distressed business is a business that cannot pay its creditors as they fall due. Normally this is because there is something inherently wrong with the business and as a potential buyer you need to know what that is and more importantly how can you fix it.
The winding up of a company can be hugely distressing for those concerned, but insolvencies do offer potential purchasers with the opportunity to acquire assets and valuable customer contracts at reduced prices. However, the purchase of a business under these circumstances must be undertaken with care and with due consideration as there are a number of potential pitfalls.
Blackstone Solicitors are known for our efficiency, attention to detail and ability to get things done; qualities much needed when pushing through and addressing the legal and tax implications of the sale or purchase of a distressed business. We will provide professional, pragmatic advice based on our years of experience in this specialist area.
Our team will do all that is necessary to ensure your business is properly represented in any negotiations and will put your interests first at all times. The sales process of a distressed business can be highly technical and can sometimes involve different areas of law and regulations; we can advise on all these areas and make sure you are in the best possible position for a successful outcome to your negotiations.
Why Legal Help is Important
It should be remembered that a distressed sale or purchase can occur in companies of any size and in any industry.
The process can be highly complex and can be considered to be an incredibly important event that will have an impact on you and the business, both in the short and long term – it is therefore imperative that you have the best legal experts at your side, not only to ensure everything progresses as it should, but also to make sure both you and the business benefits from the best possible outcome.
There are a number of issues to consider before starting the sales process of a distressed company:
Consider using a pre-pack
A pre-pack is where a business or its assets are sold almost immediately after the appointment of an administrator through a pre-arranged deal. This can be a good way of keeping the company trading and ensuring the staff remain employed.
Purchase the business as opposed to the shares
Buying the business ensures that most of the liabilities remain with the former company. However, purchasing the shares of the company requires more due diligence to be carried out and in many instances, time restraints can be a limiting factor.
Understand fully what is included in the sale An administrator can only pass title of the assets which the seller states they own. Unfortunately, this information is not always accurate. Assets which are claimed to be included, maybe in fact be the property of a supplier or customer who may then be able to recover them. Assess which assets are essential to the business and talk to the owners as soon as possible. Retention of title provisions may stop an insolvency practitioner selling some assets.
As it is unlikely that warranties will be given consideration should be given to insurance.
All assets that are purchased will be entirely at the purchaser’s risk. It is rare that an insolvency practitioner will give warranties and consequently insurance is a good option to consider.
Consider the employees of the business
Any restructuring programme can be difficult for employees. Engaging with the staff is a basic requirement and they can sometimes provide solutions to some of the problems that are encountered.
Identifying business opportunities
Knowing your industry, your competitors and their financial position is the best way to identify targets. This will help you identify distressed companies before it becomes too obvious to the larger business community.
Get your finances in order
An administrator who is selling a business is much more likely to accept an offer from a cash buyer or one who already has his or her finances in place and is ready to move quickly. Being in this position also puts you in a stronger negotiating position.
Whether you are selling or purchasing a distressed business, we ensure full compliance with corporate laws and regulations, so your company can complete the sales process on a firm financial and legal basis.
We will work with your management team and advisers to ensure all financial, tax, employment and legal aspects of the sales process are properly addressed. We are able to assist with any aspect of the sale or purchase of a business and will guide you through the technicalities in a clear and concise way. We have a team of experienced solicitors well versed in the process who are ready to assist you.
Get in Touch
Find out more about our services and how our corporate solicitors can assist you and your business by getting in touch. We have offices in Cheshire and London and are able to serve clients across the North West, including Chester and Manchester, as well as throughout the UK and also overseas.