Posted On: 05/19/2016 12:14:32 PM
Post# of 43066
A 363 sale is not the only course of action in Ch11.
The idea of Ch 11 is reorganization.....not breaking up the company.
Heddle by being the largest creditor and CEO has the ability to pursue DIP financing ( hint....he can even provide it himself or get other major shareholders to pony it up)....then they can cancel all common shares and issue Newco to the DIP financiers and all creditors.
This way he starts with a total new share structure, he and anyone he convinces to engage in the DIP would be the sole holders of Newco....at a favorable PPS and structure.
And all assets remain in place.
This is basic stuff here....insiders and financiers use Ch 11 to steal a company all the time. It is a loophole in US Bankruptcy law that hasn't been closed yet.
The idea of Ch 11 is reorganization.....not breaking up the company.
Heddle by being the largest creditor and CEO has the ability to pursue DIP financing ( hint....he can even provide it himself or get other major shareholders to pony it up)....then they can cancel all common shares and issue Newco to the DIP financiers and all creditors.
This way he starts with a total new share structure, he and anyone he convinces to engage in the DIP would be the sole holders of Newco....at a favorable PPS and structure.
And all assets remain in place.
This is basic stuff here....insiders and financiers use Ch 11 to steal a company all the time. It is a loophole in US Bankruptcy law that hasn't been closed yet.
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