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