Alert May 05, 2009

Sales under Section 363 of Federal Bankruptcy Code May Provide Significant Opportunities for Private Equity Firms

Goodwin Procter’s Private Equity and Financial Restructuring Practices issued a Client Alert concerning opportunities for private equity firms in the current leverage constrained market.  The debt crisis has largely eliminated the availability of debt financing for LBO transactions and owners of healthy businesses are holding their properties off the market rather than attempting to gain liquidity against the headwinds of wounded private equity buyers and cautious lenders.  Under the current conditions, bankruptcy auctions pursuant to Section 363 of the Federal Bankruptcy Code may yield significant values, and opportunistic private equity firms may wish to consider taking advantage of this market. Goodwin Procter’s April 28, 2009 Client Alert highlights some of the opportunities, strategies and technical aspects to consider when approaching Section 363 sales.