Questions of timing and process come up a lot these days, as owners of debt-laden print and graphic communications companies have to navigate through two distinct, yet critical, processes on the road to a successful sale of business.
Assuming the seller has "more debt than assets" and assuming timing differential in the receipt of future consideration as compared to existing debt requirements, the seller has to agree with the buyer on "price" and "structure" and the creditors have to agree on whether and how they will restructure the seller's debt.
So what comes first, the chicken or the egg?
My opinion: reach conceptual agreement with the buyer via a Term Sheet or Letter of Intent, and then approach creditors with a plan . The reverse is harder to do because most sophisticated creditors including banks, leasing companies, and paper suppliers do not like to telegraph their intentions on settlement in the absence of a "real offer".
Disclaimer: there are exceptions to this, so please do not rely on "blog talk" as a substitute for professional advice tailored to your situation.
Comments