Distressed Investing and Mergers & Acquisitions


As the volatility in the credit markets forces companies into financial crisis, savvy investors are examining opportunities to purchase businesses at bargain prices. These new investment opportunities present a host of legal and financial considerations for the investor. Our team assists potential investors with assessing such opportunities, including:

  • Identifying and evaluating distressed targets, including an analysis of the target's capital structure and the identification of opportunities and risks in the "fulcrum security"
  • Identifying potential value enhancing strategies for the target options analysis, including:
    • Consensual restructurings: operational/structural innovations, legal and financial engineering
    • Rescue financings/new money lending: PIPEs, converts, debt with warrants available restructuring procedures: chapter 11 plan sponsorship, section 363 sales, schemes of arrangement, administration sales and assessing the potential tax ramifications of each option
    • Assisting investors in managing the acquisition process by analyzing bid procedures, constructing competing bids, participating in auction and sale processes, and navigating accelerated sales
    • Advising successful acquirers regarding board representation and other corporate governance issues

Cadwalader brings together leading M&A and private equity lawyers and the talents of a prominent full service Financial Restructuring group to help analyze and evaluate the possible risks and rewards of various courses of action and to execute on the best strategy for a troubled business, both offensively and defensively. They also are able to call upon their colleagues with expertise in complex financial products and transactions, insurance, real estate, environmental, antitrust, regulation, tax, and litigation issues.

We also work with our debtor clients that may be in, or potentially face, stress at the earliest stages, providing preventative and defensive measures before a crisis to sustain value, manage difficult issues, avoid liability and, as appropriate, preserve a company's independent standing or position it so that it is most attractive to suitable investors. Our team works closely with management to:

  • Assess the company's situation by reviewing credit exposures and documentation, including guarantees, covenants, MAC triggers, contingent liabilities, capital structures, regulatory imposed capital requirements, and near term liquidity
  • Advise on corporate governance and compliance issues
  • Evaluate customer, employee, vendor, and creditor relations
  • Insulate the company from liability, and its officers and directors from personal liability, by ensuring proper documentation of board actions and conducting compliance reviews and audits as appropriate
  • Identify and develop alternative strategies, including implementing cash conservation techniques, an immediate sale of all or a portion of the business to realize remaining value, a refinancing through an out-of-court transaction, such as an equity infusion or a consensual restructuring to reduce debt or debt services, or a bankruptcy-related process, such as a section 363 asset sale or chapter 11 bankruptcy plan
  • Execute a transaction, including structuring and documenting deals, arranging financing, and obtaining regulatory approvals in a way that withstands stakeholder challenges
  • United States Treasury Department Presidential Auto Task Force on General Motors' exposure to Delphi Corporation and worked with the major stakeholders in Delphi's bankruptcy to achieve a successful emergence of Delphi from bankruptcy that involved a sale of substantially all of Delphi's assets to its lenders and General Motors
  • Parties buying and selling distressed assets from Lehman Brothers, AIG, and other leading bankrupt or severely distressed companies
  • Stearns Companies Inc. in its acquisition by JP Morgan Chase
  • Northwest Airlines, Inc. in its reorganization under chapter 11 of the U.S. Bankruptcy Code, including advice regarding business combinations with strategic partners
  • Bay Harbour Management LC and affiliates as stalking horse bidder in the $160 million purchase of retailer Steve & Barry's LLC

5 Attorneys

Bariso, Peter Special Counsel New York
T. +1 212 504 6535
Bevilacqua, Louis J. Senior Counsel New York
T. +1 212 504 6057
Mills, William P. Partner New York
T. +1 212 504 6436
Petrick, Gregory M. Partner London
T. +44 (0) 20 7170 8688
New York
T. +1 212 504 6373
Schacter, Ira J. Partner New York
T. +1 212 504 6035