What bankruptcy attorneys should know to mitigate 363 stress
Marketing distressed assets is a required action item when working a 363 assignment. However, while attorneys are master experts at navigating the court system, they may neither have the time or resources to market their client’s distressed assets thoroughly and effectively.
It’s no secret that bankruptcy clients are in a position in which the marketing and sales of their distressed assets is critical to their immediate situation. While managing all other pressing legal matters on behalf of their clients, attorneys may be at risk of addressing distressed assets too late in the 363 process. This unintentional delay could jeopardize the ultimate outcome for the client — and negatively impact the reputation of the law firm.
Fortunately, there is a strategic solution. An attorney may eliminate this unique challenge by forming a naturally cost-effective partnership with real estate professionals experienced with 363 assignments.
“From my experience in working closely with law firms and their clients to secure the highest return for business assets, collaborating with real estate experts early is critical,” said Keith Radhuber, Managing Director at International Properties Group.
In selecting candidates to partner with, attorneys should look for professionals with a track record of success and a team that already possesses an understanding of legal jargon. By working with savvy real estate experts who know how to communicate appropriately with judges, attorneys are positioned to save time, and protect their reputation that an amateur could put at risk.
“We tackle assignments pre-Chapter 11 or through the Court and 363 auction sales,” Radhuber said. “Our team functions as your dedicated real estate executives under your legal guidance. If requested, we appear before the Bankruptcy Court during the term of retention.”
According to Radhuber, understanding the worth of an asset is vital, and excellence in valuations is a quality that a real estate professional working a 363 must have. Upholding the valuation with math that makes sense will bring transparency and prevent levels of misconception.
“It is the priority of our team to review all pertinent documents to evaluate the value of the Debtor’s business assets and leasehold,” he said. “Then, we create a targeted marketing program and communicate with interested parties, locate credit-worthy prospects and respond with information.”
Efficiency, timeliness and an established process are all to be considered when marketing distressed assets. Bankruptcy clients are in need of the quickest route to resolve their financial challenges, while keeping their losses at a minimum whenever possible. Once the marketing of a distressed asset is underway, the critical next steps that follow are necessary to smoothly bring the sale to a close.
“We arrange for physical inspection of Debtor’s premises and assets by prospects,” Radhuber said. “Finally, we solicit and negotiate offers from prospective purchasers and advise legal counsel and the Debtor about accepting particular agreements. Or, we bring the widest possible audience of prospective buyers to a court-ordered auction.”
At the end of the day, a bankruptcy attorney that secures a strategic partnership with real estate experts will reap the benefits of an enhanced team without having to change their billing structure or assume additional significant costs.