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How Important Is The Stalking Horse Bid For A 363 Liquidation Sale In A Bankruptcy Situation!

Recently, while reviewing a US bankruptcy case we realized how important is the Stalking Horse Bidder and the Agreement in a liquidation scenario. Thought share some more details about the stalking horse bidding process.<br>

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How Important Is The Stalking Horse Bid For A 363 Liquidation Sale In A Bankruptcy Situation!

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  1. How important is the Stalking Horse Bid for a 363 Liquidation Sale in a Bankruptcy situation! There is a surge in bankruptcy cases across the globe as companies are fighting for their survival in a situation of economic turmoil owing to COVID-19. Companies are adopting the 363 Sale process to either liquidate the entire business or reorganize and make a fresh start post-bankruptcy. The portfolio managers and the credit research analysts are busy doing extensive credit analysisand distressed debt analysis to calculate the recovery valuation for the company in distress. In the liquidation process, one important yet ignored entity is the Stalking Horse Bidder. A stalking horse bidder, who is chosen by the company and approved by bankruptcy court sets the floor price for an auction of the debtor’s assets. Surge in Bankruptcy Cases owing to COVID-19 Companies across the globe are fighting for their survival under uncertain circumstances owing to coronavirus pandemic. With every passing day companies are collapsing under the strain of shrinking revenues and rising debt. J.C. Penny, Neiman Marcus, Lord & Taylor, Whiting Petroleum in United States; Sail Outdoors and Aldo Group in Canada; GrupoFamsa and GrupoAeromexico in Brazil; Virgin Atlantic,Debenhams and Noble Corporation in United Kingdom are certain prominent companies across the globe that filed for Bankruptcy during the first half of 2020.According to credit insurance company Euler Hermes, by the end of 2021 the world would post double digit rise in insolvency cases. The biggest surge in bankruptcy cases is expected to occur in North America followed by Central and Eastern Europe.According to American Bankruptcy Institute,total commercial Chapter 11 filings during the first half of 2020 surged 26% to 3,604 from 2,855 in the same period in 2019. More Details: https://www.valueadd-research.com/blog/how-important-is-the-stalking-horse-bid-for-a- 363-liquidation-sale-in-a-bankruptcy-situation/

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