Solid opco, say around ~$1M EBITDA, fits a lot of the target criteria. Business fell into bankruptcy to cover legal costs due to clerical violations of its employees where the violations were not related to their business operations.
Would any SBA lenders go for such a transaction if the cash flow is real or would they just keep away from the stink of chapter 11?
Wasn't trying to be a distressed buyer when I joined the platform, but trying to keep an open mind if the price is right!
Anybody bought a company in Chapter 11 want to teach me how to do it?
by a searcher from Harvard University - Harvard Business School
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Secured lenders also can "credit bid" on the assets in the amount of their secured claim in chapter 11 - meaning if the debtor owed a lender 2 million dollars, they get an automatic 2 million dollar "freebie" bid on the company that you'd have to overbid to win. These type of acquisitions are better suited for sponsors who can raise money from investors or have a really strong relationship with lenders who can move quickly on financing approvals.