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363 Sales as a Health Care M&A Tool, Part 2 - Pros and Cons for Buyers and Sellers

 

Over the summer, we wrote about why health care companies may want to consider buying assets out of bankruptcy, taking advantage of the Bankruptcy Code Section 363 sale process (a “363 Sale”). We are back with our second post, to provide more detail to the process and discuss some pros and cons of 363 Sales.

USA, Insolvency & Restructuring, Litigation, Mintz, Due diligence, Non-disclosure agreement, Title 11 of the US Code
363 Sales as a Health Care M&A Tool, Part 1 - Overview

This two-part blog series discusses why buyers looking to make strategic purchases in the health care industry might want to take advantage of the Bankruptcy Code Section 363 sale process (363 Sale) and the pros and cons of buying assets out of bankruptcy through a 363 Sale.

USA, Healthcare & Life Sciences, Insolvency & Restructuring, Mintz, Due diligence, Coronavirus
SDNY Bankruptcy Court holds that the bankruptcy safe harbors do not preclude state-law fraudulent transfer actions brought by creditors

A bankruptcy judge in the Southern District of New York recently held that section 546(e) of the Bankruptcy Code does not prevent a debtor’s creditors from bringing state-law fraudulent conveyance actions that challenge a leveraged buyout of the debtor. Weisfelner v. Fund 1 (In re Lyondell Chem. Co.), No. 10-4609 (REG), --- B.R. ----, 2014 WL 118036 (Bankr. S.D.N.Y. Jan. 14, 2014).

USA, New York, Insolvency & Restructuring, Litigation, Alston & Bird LLP, Debtor, Leveraged buyout, Title 11 of the US Code, United States bankruptcy court, US District Court for the Southern District of New York
SDNY bankruptcy court upholds swap provision that modifies the method to calculate amounts owing upon the counterparty’s bankruptcy

TheLehman Brothers bankruptcy court has determined that the contractually specified methodology for conducting the liquidation of a swap agreement is protected by the safe harbor provisions of the bankruptcy, even if the selected methodology would be more favorable to the non-defaulting counterparty than the liquidation methodology that would apply absent the bankruptcy.See Michigan State Housing Dev. Auth. v. Lehman Bros. Deriv. Prods. Inc. (In re Lehman Bros. Holdings Inc.), No. 08-13555, ---B.R.

USA, New York, Derivatives, Insolvency & Restructuring, Litigation, Alston & Bird LLP, Bankruptcy, Swap (finance), Liquidation, International Swaps and Derivatives Association, Lehman Brothers, United States bankruptcy court, US District Court for the Southern District of New York
Seventh Circuit adopts Second Circuit’s broad safe harbor definitions

The Seventh Circuit has explicitly adopted the Second Circuit’s broad interpretation of the terms “transfer” and “settlement payment” in the Bankruptcy Code’s safe harbor provisions. See Peterson v. Somers Dublin Ltd., No. 12-2463, --- F.3d ----, 2013 WL 4767495 (7th Cir. Sept.

USA, Insolvency & Restructuring, Litigation, Alston & Bird LLP, Federal Reporter, Enron, Second Circuit, Seventh Circuit
Ninth Circuit holds bankruptcy courts may recharacterize debt as equity

The Ninth Circuit has joined the majority of Circuit Courts in holding that bankruptcy courts have the authority to recharacterize alleged debts as equity. See Official Comm. of Unsecured Creds. v. Hancock Park Capital II, L.P. (In re Fitness Holdings Int’l, Inc.), No. 11-56677, --- F.3d ----, 2013 WL 1800000 (9th Cir. April 30, 2013). In doing so, the appellate court has explicitly reversed the contrary precedent of In re Pacific Express, Inc., 69 B.R. 112, 115 (B.A.P. 9th Cir. 1986).

USA, Insolvency & Restructuring, Litigation, Alston & Bird LLP, Debt, Ninth Circuit, United States bankruptcy court