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    A Seller In Financial Distress
    2016-04-11

    Most companies that file bankruptcy end up liquidating, that is, ceasing business. Some bankrupt companies, however, even though they have accumulated substantial debt, have a customer base that will produce cash flow sufficient to fund future operating expenses. Federal bankruptcy law provides a procedure for a purchaser to buy a distressed seller out of bankruptcy. The procedure is known as a motion, or request, to sell assets free and clear of liens. Basically, a seller with an ongoing business in bankruptcy has the right to sell its assets (i.e., its business) to a purchaser.

    Filed under:
    USA, Corporate Finance/M&A, Insolvency & Restructuring, Offit Kurman, Bankruptcy, Liquidation, Fair market value
    Authors:
    Glenn D. Solomon
    Location:
    USA
    Firm:
    Offit Kurman
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