March 18, 2020
This briefing is not intended to and does not constitute legal advice. Questions concerning how the law applies to your specific factual circumstance should be directed to one of our attorneys at the firm.
A quick scroll through today’s headlines reveals the far-reaching effects of the COVID-19 pandemic on the global economy. The pandemic’s reach is wide-ranging, impacting both global stock markets and main street businesses alike. Your business, whether a startup or an established multi-generational company, faces unique challenges presented by COVID-19.
As noted in our FAQs for Businesses, Conroy Baran remains committed in these trying times to assisting our business clients with their day-to-day corporate needs, as well as their mergers, acquisitions, sales, reorganizations, succession planning, corporate and securities needs, and can accommodate safe client contact through video conferencing and screen sharing, as well as the usual talk, text, and email.
Your business’s distinct circumstances depend on complex factors such as number of employees, industry, cash flow, cash reserve, market position, and location – not to mention the particular stage of your business’s lifecycle. No matter the unique dynamics and challenges faced by your business, Conroy Baran is devoted to leveraging our expertise to help our business clients navigate these uncharted waters. Two such areas may be of particular note to you at this time.
CREDITOR’S RIGHTS AND RESTRUCTURING
As the COVID-19 outbreak progresses, it has become clear that no business will escape its economic effects – be it loss of revenue, workforce management difficulties, disruption of supply lines, difficult collections on accounts receivable, or, in the most extreme circumstances, restructuring, liquidation, or sale of a company through the Chapter 11 process.
Conroy Baran’s Creditor’s Rights and Restructuring Practice can advise on and assist you with creditor’s rights issues, both during the collateralization and enforcement process as well as providing creditor representation in bankruptcy proceedings.
For companies in distress, we can help evaluate your options if you think you may be close to an insolvency event, including court workouts, Chapter 11 reorganization, or the sale of business assets or the entire company. Although it may be counterintuitive, it may be important to set aside resources outside of operations and start budgeting for a reorganization process.
M&A AND JOINT VENTURE OPPORTUNITIES
Even in a seemingly volatile economic context, opportunities exist to explore both buying and selling in the M&A context as well as leveraging business relationship for security. As a buyer, if your business is in a position to expand or consolidate through strategic acquisitions, opportunities will abound. Extra due diligence will be needed and buyers will need to mindful to coordinate creative financing with both lenders and sellers, as it is still uncertain how institution lenders will respond to the current market.
On the other hand, if your company is experiencing the negative effects caused by the pandemic and you are looking to preserve jobs and the value of your assets, a strategic sale, merger, or joint venture, may help keep you in business. Taking an inventory of possible partners early could help avoid crisis.
Whether you are considering buying, selling, or merging, you need to prepare early. Clean up your corporate minutes, have that annual meeting, organize your records electronically, ensure your contracting practices are forward-looking for a major transaction and, most importantly, talk to your key advisors sooner rather than later. Conroy Baran has helped our clients close numerous M&A and joint venture deals, both as buyers and sellers, and can help guide you through the complex M&A or joint venture process.
Kyle Conroy: 816-388-9686
Robert Baran: 816-616-5009
Larry Pittman: 816-210-9680
Christopher Stewart: 816-522-1582
Andrew Potter: 719-359-2701
Bob Reynolds: 417-496-2467