Purchasing or investing in distressed businesses gives rise to
complexities and considerations that are not typically present in
'good book' deals. Considerations for buyers and investors
in such circumstances include the need to pay careful attention to
structuring the transaction from the outset, the applicability of
insolvency laws and the extent and duration of due diligence.
Buyers should also be mindful of the extent of the seller's
and/or target's distress, the underlying interests of
stakeholders, valuation difficulties and any advantages that
insolvency processes can offer. The expanding range of insurance
products available in the market, such as warranty and indemnity
policies incorporating 'synthetic warranties', can also
help facilitate a deal where suitable warranty and indemnity
protection from the seller is lacking. In this alert, the first in
a three-part series, we consider transaction structuring and the
impact of insolvency laws when investing in
