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FocalPoint has the specialized expertise to counsel
distressed companies and help them formulate the appropriate
strategic alternatives to emerge from indebtedness and
return to profitability.
The principals of FocalPoint with diversified backgrounds
in law, public accounting, senior lending, private equity
and investment banking at leading national and international
firms such as Merrill Lynch, Houlihan Lokey Howard &
Zukin, GE Capital and PricewaterhouseCooper have extensive
experience representing financially distressed companies
in both bankruptcy proceedings and in out-of-court transactions.
FocalPoint provides the following services to creditors,
debtors and equity holders of companies in financially
distressed situations:
- Arranging mergers with strategic
partners
- Section 363 asset sales
- Raising additional debt or equity
capital
- Divesting corporate assets
- Asset sales pursuant to assignments
for the benefit of creditors
- Devising new capital structures
to manage cash outflows
- Renegotiating existing debt
- Working with turnaround consultants
to formulate and negotiate workout plans among creditors,
debtors, and equity holders
The process includes:
- Advising its clients in the development
of M&A and divestiture strategies, including:
tax-implications, exit strategies, capital structure
implications, bankruptcy alternatives, creditor negotiations,
etc.
- Preparing confidential information
memoranda
- Establishing valuation criteria
and ranges
- Identifying, screening and initiating
discussions with potential buyers or acquisition targets
- Structuring and negotiating M&A
transactions
- Arranging acquisition financing
for buyers, including all types of debt and/or equity
- Coordination legal, tax, accounting
and other closing-related activities
Out-of-Court Sale
If a company has sufficient liquidity and determines
to sell or divest specific assets (or subsidiaries)
and to negotiate with creditors outside of the bankruptcy
process, many advantages exist, including:
- Preservation of enterprise value
— The earlier a sale
is affected, the less value deterioration has taken
place.
- Eliminations of many bankruptcy
administrative fees (i.e. trustee fees, company and
creditors insolvency counsel fees, creditor financial
advisor fees, etc.)
- Increased willingness of creditors
to ‘work” with the company during the process
and
- Minimizing disruptions to operations
and employees — More likely to retain key employees
and customers
Sale Pursuant to a bankruptcy plan
of reorganization or §363 Sale
In some situations, an out-of-court sales process may
not be a viable option for a company. In circumstances
when an out-of-court sale is not feasible (or consent
for a plan can not be achieved), a sale using the bankruptcy
process can be used to expedite resolution and provide
tax advantages to the company. Advantages to a sale
using the Bankruptcy Code include:
- Automatic stay from creditor
payments
- Availability of Debtor-in-Possession
(“DIP”) financing
- 120-day exclusivity period for
the debtor to formulate a plan of reorganization (“POR”)
or sale without creditor interference
- Ability to facilitate a §363
sale process which allows buyers to acquire the assets
of the business free and clear of any liens or creditor
claims
Securities products and services are offered through FocalPoint Securities, LLC.
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