It is no secret that with the combination of a strong economy, many baby-boomers approaching retirement age and the accumulation of cash by buyers, M&A activity has been in a frenzy. There will come a time, however, when the economy turns, whether that is in 2019, 2020 or later. Does that mean that M&A activity will come to a standstill and that opportunities for buyers will cease to exist? The answer is no. A downturn in the economy usually results in an uptick in business bankruptcy filings. A business bankruptcy filing can either be a reorganization or a liquidation. Most reorganization attempts fail. However, the unfortunate demise of a bankrupt company can present opportunities for buyers. The bankruptcy laws include a procedure for a bankrupt company to sell its assets free and clear of all liabilities. The facts that there are usually a limited number of potential buyers in a bankruptcy and, correspondingly, the sales price for assets is not always at fair market value, present potential for opportunistic buyers. So, although the economy will eventually encounter a downturn, buyers should keep their eyes and ears open for openings to purchase a company out of bankruptcy.

If you have any questions about this or any other M&A issue,
please contact Glenn Solomon at gsolomon@offitkurman.com or 443-738-1522.

ABOUT GLENN D. SOLOMON

gsolomon@offitkurman.com | 443-738-1522

Glenn D. Solomon is a principal at Offit Kurman and has provided counsel to businesses and business owners for more than twenty-five years. He has extensive experience in the purchase and sale of businesses, structuring ownership agreements, and advising companies in financial distress.

ABOUT OFFIT KURMAN

Offit Kurman is one of the fastest-growing, full-service law firms in the mid-Atlantic region. With over 185 attorneys offering a comprehensive range of services in virtually every legal category, the firm is well positioned to meet the needs of dynamic businesses and the people who own and operate them. Our twelve offices serve individual and corporate clients along the I95 corridor in the Virginia, Washington, DC, Maryland, Delaware, Pennsylvania, New Jersey, and New York City regions. At Offit Kurman, we are our clients’ most trusted legal advisors, professionals who help maximize and protect business value and personal wealth. In every interaction, we consistently maintain our clients’ confidence by remaining focused on furthering their objectives and achieving their goals in an efficient manner. Trust, knowledge, confidence—in a partner, that’s perfect.

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