Optimize Value From Distressed Assets – The Need For Speed

LETTER FROM THE EDITORS

In the aftermath of the financial crisis, the U.S. federal government provided banks with liquidity and incentives to lend money to borrowers. Interest rates plummeted. Companies took on more debt to stay afloat. The results have been lasting: companies are still able to access cheap financing, thereby quelling the tide of bankruptcy filings, which continues to ebb. While there was speculation that 2014 might find retail, shipping and municipalities turning to the bankruptcy courts, for the most part, filings are at historical lows.

However, bankruptcy professionals aren't sitting on the sidelines. Pre-petition workouts, out-of-court restructurings and other alternatives remain popular. When a chapter 11 case is filed, it's increasingly common to consider a shorter, less expensive path: an asset sale, allowed under Section 363 of the Bankruptcy Code, for the benefit of the debtor, the buyer and, occasionally, creditors.