Distressed m&a and purchase of business units Abstract

Distressed m&a and purchase of business units

Abstract:

Acquisition of assets or business units from companies in a distressed situation is a growing tendency in the Spanish market during the last years. Taking into account the current economic situation, and as the insolvency moratorium is coming to an end, it is
foreseeable that in the near future the amount of this kind of transactions will increase.

In the majority of these deals, at some time the parties consider, as a strategic decision, whether entering into the purchase in a preinsolvency situation or waiting until the seller falls into insolvency and try to perform the deal in that moment. As a general rule, there is no universal solution which allows deeming as preferable one of these options always and under any possible circumstances; therefore, this article intends to analyse, from a practical point of view, the basic conditions and characteristics of both solutions, in order to allow an evaluation of its main pros and cons.

Keywords: M&A (mergers and acquisitions), bankruptcy, production units, refinancing agreements, claw-back action, common phase, liquidation phase, company voluntary agreement, pre-pack