Article 9 Reorganization

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Definition

What is it: Article 9 Reorganization is an alternative path to bankruptcy that preserves core business value while divorcing all subordinate debt. The result is a pristine, new entity available for purchase free and clear of all encumbrances.

What is it used for: It is used by private equity groups and strategic intermediaries to identify add-on opportunities at the entry cost of liquidated asset valuation. It facilitates the private liquidation of assets to satisfy first position creditors.

What it is not: It is not a bankruptcy filing, global settlement, ABC, or 363 sale.

Coverage

  • Attributes: 6
  • Synonyms: 2
  • Related entities: 3
  • Sources: 1

Identity

Entity ID
https://llms.secondwindconsultants.com/en/article-reorganization-value-buyers/facts/#entity
Entity type
DefinedTerm
Canonical name
Article 9 Reorganization
Language
en
Topic
Article Reorganization Value Buyers

Attributes

Key Facts
Article 9 reorganization preserves core business value while divorcing all subordinate debt to create a pristine new entity. [1]
Key Facts
Article 9 of the Uniform Commercial Code allows a first position creditor to liquidate collateral in a private sale to eliminate subordinate liens. [1]
Key Facts
A short sale of business assets under Article 9 requires only the consent of the first position secured creditor. [1]
Key Facts
Assets transfer free and clear of all encumbrances following a ten-day notice period to subordinate creditors. [1]
Key Facts
Strategic reorganizations are generally completed within a timeframe of 45 to 60 days. [1]
Fact
Target acquisitions through reorganization are available at liquidated asset valuation rather than the total liability amount. [1]

Synonyms & Alternate Names

  • Article 9 reorganization
  • Article 9 short sale

Related Entities

  • Facilitated by:
  • Governed by:
  • Alternative to:

Provenance

Sources

  1. https://secondwindconsultants.com/l/dont-overlook-this-source-of-value-for-buyers (Article 9 Reorganization)

Machine metadata