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Respondents Divided over Sale Process that Will Return the Most Value of a Bankrupt Company in Latest ABI Poll

Contact: John Hartgen
             703-739-0800
             jhartgen@abiworld.org

RESPONDENTS DIVIDED OVER SALE PROCESS THAT WILL RETURN THE MOST VALUE OF A BANKRUPT COMPANY IN LATEST ABI POLL

July 24, 2007, Alexandria, Va. —Results of a recent American Bankruptcy Institute online poll showed that respondents were somewhat divided over whether or not sales of large companies as going concerns under the §363 process returned far less value to the bankruptcy estate than through a chapter 11 reorganization. The largest number of respondents (46 percent) disagreed that the sale of a large company under the §363 process would return far less value to the estate than a chapter 11 reorganization. Twenty-three percent “strongly disagreed” and another 23 percent “disagreed somewhat.”

Traditionally, the sale of a bankrupt business is completed through a chapter 11 reorganization plan that identifies and deals with each class of creditors and equity-holders, but it can take months or years to complete. A §363 sale, which is much like a controlled auction, can be completed in as little as two to three months and has become a preferred method for sales of distressed businesses.

Thirty-one percent of respondents agreed that sales of large companies as going concerns under §363 return far less value to the bankruptcy estate than through a chapter 11 reorganization. Sixteen percent “strongly agreed,” while another 15 percent “agreed somewhat” that sales of large companies under the §363 process would return less value to the bankruptcy estate than a chapter 11 reorganization. Twenty-three percent of respondents did not know or had no opinion.

ABI members and members of the public were welcome to submit their response to the statement: “Sales of large companies as a going concern under section 363 return far less value to the estate than through a Ch 11 reorganization.” The latest ABI Quick Poll was open to the public for voting from July 12-19.

ABI’s Quick Poll is posted on ABI’s home page, www.abiworld.org. ABI members and the public are invited to respond to a question on a timely bankruptcy or insolvency issue. Visit http://www.abiworld.net/quickpoll/ to access the results of previous ABI Quick Polls.

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ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABI membership includes nearly 11,500 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals, providing a forum for the exchange of ideas and information. For additional information on ABI, visit www.abiworld.org. For additional conference information, visit http://www.abiworld.org/conferences.html.