Opportunity Buying–Purchasing Assets Before and After Bankruptcy

Every downturn creates an opportunity for the cash buyer to acquire valuable assets at a favorable price. The opportunity arises when the owner of an asset fails, and can no longer benefit from holding the asset. The failing company must either sell the asset to raise cash for operations or to pay its creditors. Assets can be everything from real estate to operating businesses to intellectual property.

Secured creditors are often the driving force behind asset sales. When a borrower gets into financial problems, most banks transfer the credit into the workout department, often known as Special Assets or Loan Adjustment. This allows the bank’s workout professionals to take charge and to drive the process of either restructuring or collecting the loan. Often, this process requires sale of some or all of the collateral, which is the assets of the borrower.

Nick DeLancie, a member of the JMBM Special Assets Team™, and I presented an exciting program a few years back that we called “Vulture Buying.” Times have c hanged, and instead of vultures trying to scavenge for nuggets, today’s buyers are looking for opportunities that aren’t available in the open market. Many opportunity buyers are price-sensitive, but strategic buyers also abound as opportunities to acquire key parcels of real estate, valuable intellectual property, or stand-alone business operations are created. We’ve updated the program materials and changed the title to Opportunity Buying 101. Opportunity Buying 101 is a graphic introduction into the world of buying and selling valuable assets of distressed companies.

The JMBM Special Assets Team™ has handled countless sales of assets in distressed situations. Whether before or after bankruptcy, through receiverships of assignments for the benefit of creditors (“ABCs”), by way of foreclosure or a negotiated sale, workout professionals can count on the JMBM Special Assets Team™ to help choose the best procedure that will generate the highest price. There are many traps for the unwary in selling assets to opportunity buyers. Experienced workout professionals know the value of engaging the JMBM Special Assets Team™ to guide them through this potential minefield.

This is Dick Rogan, bank lawyer and author of www.SpecialAssetsLawyer.com, signing off for now. Join us again soon to check out what’s new in the World of Workouts.

Year after year, day after day, workout professionals in the know rely on JMBM’s Special Assets Team™ to handle problem commercial and real estate loans. Whatever problem loans you have, chances are, we’ve seen it. Give us a call.

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Our Perspective. JMBM represents commercial banks, special servicers, private lenders, asset-based lenders, hard money lenders and factors. We help lender clients throughout the United States craft business and legal solutions to their commercial and real estate troubled loans. For more information, please contact Dick Rogan at RRogan@JMBM.com, or (415) 398-8080.

Richard A. Rogan is Chair of the JMBM Special Assets Team™. He also serves as the co-managing partner of JMBM’s San Francisco office and co-chair of its Bankruptcy Practice Group.

JMBM’s Special Assets Team™ has represented hundreds of lenders in California and throughout the United States. We regularly appear in bankruptcy courts, district courts and superior courts. We are proud to serve as trusted counsel and advisors who look for a business solution and try to help lenders find the best possible resolution for each troubled loan. Whether a loan is being newly documented, restructured or litigated, JMBM’s Special Assets Team™ has the skill, know-how and experience to solve your problem in a practical no-nonsense way.

NOTE TO CONSUMERS: As a matter of Firm policy, JMBM does not represent individual consumers who have disputes with their lenders. Many lenders have specialized consumer workout professionals who have the time to help consumer borrowers. There are many fine attorneys who specialize in representing consumers. Individuals with consumer lending problems should contact a lawyer or law firm who specializes in consumer insolvency and bankruptcy in their local area. When in doubt, we suggest you contact your local bar association’s Lawyer Referral Service. [For example, see Bar Association of SF or LA County Bar Association Lawyer Referral Services]

JMBM does not provide legal advice to consumers, and cannot respond to consumer inquiries.