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Exit Strategies for Third Parties At the Contract Stage (Pre-Petition). The parties need to take stock of each other before signing a contract for services. Identifiable risks should have identifiable consequences to the relationship. Because of the interdependence of the customer and service provider, scenario models need to be developed for each case. An experienced outsourcing lawyer will be able to provide appropriate scenario models, risk definitions and an array of potential consequences in each situation, tailored to the needs of the parties. A creative outsourcing lawyer will also address emerging scenario models to deal with emerging risks and configurations of service delivery processes. Exit Strategies (Post-Petition) Pre-packaged Plans of Reorganization. In its most strategic form, a voluntary bankruptcy petition can enable a company to shed costly leases, employment contracts, Insider "Management Buyout." In our experience, the management of the debtor-in-possession has a huge incentive to purchase the assets and operate them. They know the value of the company's operations and can, compared to a third party, most easily generate revenues. If the creditors are not paid in full, a sale of the bankrupt's estate to the management team, or even a prior management team, might deprive creditors and equity holders of their investment. And in contemplation of such a buy-out, management might suspend aggressive growth strategies till after the Plan of Reorganization has been judicially approved.
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