Distressed M&A focuses on the transactional, financing and performance needs and requirements of banks, investors and the management teams of companies that are underperforming and/or in financial stress or distress. By combining the market leading capabilities, skills and experience of our reorganization Services, we provide clients with specialized, differentiated and value added perspectives, approaches and results. Our focal point products include Fast Track M&A services and a Stressed Solutions offering. Common to both is an understanding and approach that recognizes the importance of time and managing uncertainty in these difficult circumstances.

Our Distressed M&A offering combines extensive Corporate Finance experience with the wider advisory and transactional services of our firm, enabling us to deliver a comprehensive offering in distressed situations to lenders, shareholders and companies themselves. They also are able to call upon their colleagues with specialized industry expertise, regarding complex financial products and transactions, such as derivatives and credit default swaps, insurance, and real estate, to environmental, antitrust, regulation, tax, and litigation issues.

Aggressive Strategies and Advice

As the volatility in the credit markets forces companies into financial crisis, savvy buyers are examining opportunities to purchase businesses at bargain prices. However, the new investment opportunities present a host of legal and financial considerations for the buyer.

Our Distressed M&A Group assists potential investors with assessing such opportunities, including:

  • identifying and evaluating distressed company targets,
  • identifying potential value enhancing strategies for the target,
  • examining strategic bid alternatives, including consensual turnarounds, passive discounted/distressed debt investing, loan-to-own, BIFR change in management, and section 391 sales,
  • assisting investors in managing the acquisition process by analyzing bid procedures, constructing competing bids, participating in court authorized auction processes, and navigating accelerated sales.
  • advising successful acquirers regarding board representation and other corporate governance issues.

Prospective Strategies and Advice

Companies that face financial, operational and strategic challenges need experienced counsel that understands the industry in which the company operates the competitive landscape, and the business itself to help create and negotiate an effective strategy that maximizes value for equity holders and creditors alike. Areion has developed a “Distressed Audit” to assist companies that may be in, or potentially face, stress. The Distressed Audit allows us to provide assistance beginning at the earliest stages, providing preventative and defensive measures before a crisis to sustain value, manage difficult issues, avoid liability and, as appropriate, preserve a company’s independent standing or position it so that it is most attractive to suitable investors.

As part of the Distressed Audit, our team of lawyers will work closely with management to:

  • assess the company’s situation by reviewing credit exposures, including guarantees, contingent liabilities, capital structures, regulatory imposed capital requirements, and near term liquidity.
  • Protect the company from liability and its officers and directors from personal liability by ensuring proper documentation of board actions and conducting compliance reviews and audits as appropriate.
  • evaluate and develop alternative strategies, including implementing cash conservation techniques, an immediate sale of all or a portion of the business to realize remaining value, a refinancing through an out-of-court transaction, such as an equity infusion or a consensual restructuring to reduce debt or debt services, or a bankruptcy-related process, such as a section 391 asset sale or BIFR.
  • execute a transaction, including structuring and documenting deals, arranging finance, and obtaining regulatory approvals in a way that withstands stakeholder challenges