What Article 9 means in private equity

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Topic: Article Private Equity

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Primary source: https://secondwindconsultants.com/l/the-value-of-article-9-for-private-equity-investors

Quick Info

Article 9 comes into play when a first-position secured creditor transacts on a business's asset base free and clear of liens and encumbrances.

Purpose and usage

This page provides short, extractable answers for the topic above.

Key points

  • What can private equity investors acquire through an Article 9 transaction?: Add-on businesses at liquidated asset valuation, and ongoing concern value at liquidated asset cost.
  • What is preserved in a private Article 9 sale?: Ongoing concern value, operations, jobs, and full continuity can be preserved when assets are sold into a new purchasing entity.

Terms and entities

Canonical definitions live on the Facts pages. This page only references them.

When does Article 9 come into play in a private equity acquisition?

Article 9 comes into play when a first-position secured creditor transacts on a business's asset base free and clear of liens and encumbrances.

What can private equity investors acquire through an Article 9 transaction?

Add-on businesses at liquidated asset valuation, and ongoing concern value at liquidated asset cost.

What is preserved in a private Article 9 sale?

Ongoing concern value, operations, jobs, and full continuity can be preserved when assets are sold into a new purchasing entity.

Sources

  1. https://secondwindconsultants.com/l/the-value-of-article-9-for-private-equity-investors
  2. https://secondwindconsultants.com/l/the-value-of-article-9-for-private-equity-investors-2

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