Bankruptcy “Go to Market”

As part of a Chapter 11 bankruptcy proceeding, the debtor in possession is precluded from providing equity capital as part of a plan of reorganization until the unsecured creditors’ claims are adjudicated by the court. One approach taken by us is to test the marketplace of potential buyers to secure the extent of interest; if there is interest, to determine the estimated market value of a purchase.

The “Go to Market” involves these steps:

• Perform an analysis of the underlying economics of the business now and going forward
• Develop a summary (Teaser) of the company and its major attributes
• Create a Confidential Information Memorandum (CIM) as a more complete description of the company, to be provided if there is sufficient interest in the purchase
• Generate a list of potential buyers, including financial and strategic prospects
• Provide an email outreach to the above list, including the Teaser
• Assess any responses, including those requesting the CIM
• Follow up with all respondents and document their interest level
• Assist the parties to structure and negotiate a transaction