Investors have found a suitable restructuring investment opportunity and are willing to pay enough. Can they ensure that they are confirmed as official restructuring investors?
the situation is not so simple .
In a usual M&A transaction, the company and the investors look at each other, make due diligence, sign an agreement, close the deal, and pay. Most interviews are one-on-one. Even if several acquirers sometimes compete, it is basically the balance and trade-offs of commercial interests that determine the final winner.
But the gameplay of in bankruptcy and reorganization investment is different from .
The main process of restructuring investment includes: understanding the project opportunity, due diligence, and the manager determining the formal restructuring investor (if an open selection method is used to recruit restructuring investors, it will also involve restructuring investment registration and deposit payment, and formulating the restructuring investment plan, selection of official reorganization investors, etc.), signing of a reorganization investment agreement, and participating in the formulation of a draft reorganization plan; after the draft reorganization plan based on the reorganization investment agreement has been voted by the creditors' meeting and approved by the court ruling , investors can generally execute the reorganization plan through the debtor as a new shareholder of the debtor to complete the integration after the reorganization.
This involves dealing with many parties, and each party has a say. It is difficult for you to win by "getting" one party.
In fact, the first step is to become a formal restructuring investor. How are the investors of restructuring determined?
In practice, restructuring investors can be introduced by the debtor or manager through negotiation or public recruitment, or they may be recommended by creditors or government departments. Public recruitment requires the selection process to determine the restructuring investors, while the selection process will not be involved in determining the restructuring investors through negotiation. The manager and the intended investors will consult and negotiate one by one, and finally determine the restructuring investors.
is best determined through negotiation rather than open recruitment. The public recruitment of
is more competitive and uncertain for investors.
Sometimes, the bidding among investors falls into "vicious" competition. Sometimes, investors waste a lot of energy and cost, but in the end they end up "running around".
Since the open recruitment process is too uncertain for investors, is there any way to be identified as a restructuring investor without participating in the selection?
In fact, because the "Corporate Bankruptcy Law" does not clearly stipulate the method and standard for determining investors in reorganization, public recruitment is not a legally required procedure. Whether to adopt the public recruitment process is generally decided by the administrator, the court and the creditors committee , and this leaves room for fighting.
For example, investors can negotiate with the manager/court before the public recruitment of investors, and strive to be recognized as a formal restructuring investor through negotiation.
For another example, after the public recruitment, you can negotiate with all creditors to acquire all the claims against the debtor, thereby negotiating with the administrator to end the public recruitment process and avoid the uncertainty caused by the selection process.
The authors of this article are all from King & Wood Mallesons . They love to grapple with complex legal and business issues, challenge difficult projects and share their experiences with everyone on a whim.
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