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Supplier Strategies for the Financially Distressed Buyer

February 8, 2018

While the stock market continually reached new highs last year, the pace of retail bankruptcies did not abate. In just the last year, Toys R Us, Gymboree, Radioshack, Payless ShoeSource, BCBG Max Azria, Eastern Outfitters, and The Limited all filed for bankruptcy. This trend has continued in 2018, with the recent bankruptcy filing of The Bon-Ton Stores, and market watchers expect continued weakness in traditional retail.

Given this uncertainty, it is a good time to review strategies for dealing with a financially distressed buyer. In this alert, we set forth a variety of options to limit the seller’s risk followed by a brief discussion on how those strategies may impact the seller’s preference liability in a subsequent bankruptcy filing.

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