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Business Survival and Yes, Success, During the Coronavirus Pandemic

Client Alert

Gibbons Special Alert

March 19, 2020

During the coronavirus pandemic, businesses are facing, and will continue to face, numerous difficult challenges. Your company and you will benefit from advice that will not only help you to survive the current situation, but possibly succeed. The Distressed Situations Team at Gibbons, part of the firm’s highly regarded Corporate Department, is well-positioned to help you through business emergencies in real time, and to evaluate financing alternatives, existing contractual arrangements, ownership and management issues, and restructuring alternatives for survival and future growth – as well as identify strategic opportunities.

Our firm includes attorneys who are experienced as business owners and managers, which enables us to better understand the challenges and opportunities that distressed situations pose. Our experience in representing all sides in distressed situations, whether creditors, debtors, sellers, buyers, and other contract and dispute parties, creates valuable perspective and facilitates easier negotiations, closings, and restructured agreements.

The unique benefits and services offered by the Gibbons Corporate Department Distressed Situations Team include ready access to experienced attorneys in the following matters:

Financial Crisis Planning

  • Advise in obtaining relief from creditors, guarantees, and other contract obligations, avoiding lawsuits, and, when necessary, defending and prosecuting lawsuits
  • Advise in distressed and non-distressed, friendly and non-friendly, creditor situations to protect companies and their officers, directors, and shareholders, especially from personal liability; advise lenders and borrowers with loan workouts and forbearances; obtain and enforce judgments; and locate and identify assets
  • Advise and protect guarantors of loans, leases, and other financial obligations
  • Advise on contract disputes and renegotiations, and on modifying and enforcing contractual rights and third-party beneficiary rights with respect to: insolvency situations, supply agreements, purchase agreements, licensing arrangements, leases (equipment and real property), and joint ventures
  • Advise in connection with business streamlining and downsizing, including workforce reduction, lease concessions and termination, supply contract modification and termination, and future commitment reductions; advise on ways to minimize related risks and liabilities

Financing Alternatives

  • Utilize our strong financial market and private relationships to introduce clients to sources of capital
  • Advise in connection with commercial banks, private equity, venture capital, early-stage investments, investment banking, and other financial services transactions
  • Advise in negotiation, documentation, and closing of secured and unsecured commercial loans, debt restructuring, leveraged leasing and asset-based financing, guarantees, commercial standby letters of credit, and other credit enhancements; offer the benefit of our extensive experience in handling commercial loans in the middle-market (generally loans of $2 million to $200 million) for a broad range of lenders, as well as in advising mid-market borrowers

Ownership Issues

  • Advise shareholders, partners, and owners of closely-held and family companies and other middle-market businesses in intra-owner disputes; advise on interpretation and enforcement of shareholder, partnership, and operating agreements, forced sales, and company restructurings

In addition to concerns and challenges, the Distressed Situations Team assists clients in identifying strategic opportunities to be found in crisis situations, including:

  • Acquisition of specific assets of a distressed company, or the entire business, including use of traditional M&A techniques, §363 bankruptcy sales, acquisition of debt of distressed companies, secured party sale transactions, and other creative techniques
  • Management agreements designed to turn around a troubled company with rights to acquire the company when restructured
  • Recapitalization plans using strategic debt and equity investments providing for control positions to opportunistic investors

Industries Represented

  • Service organizations, manufacturers, distributors, retailers
  • Financial institutions and financial services companies
  • Private investment companies, private equity groups, hedge funds, holding companies, and real estate investment trusts and other real estate entities
  • Real estate developers, construction firms, and investment and management companies
  • Technology companies, including biotechnology and computer software and equipment
  • Pharmaceutical companies and pharma industry-related businesses
  • Telecommunications
  • Healthcare providers and healthcare management
  • Transportation
  • Gaming/casinos
  • Energy – investment funds and energy projects

The Distressed Situations Team, during the financial crisis in 2009 and continuously active since then, is geared to advise clients in both distressed and opportunistic situations. The Team relies on our broad experience to provide clients with effective and efficient legal advice, carefully balancing the need for the highest level of time-critical advice with client economics by assigning appropriately experienced attorneys to a given matter. Our strong relationships and experience with commercial and investment bankers, restructuring firms, private investors, other potential investors and purchasers, and corporate ownership and management, enable us to guide clients through achievable negotiations, agreements, and transactions, especially during today’s difficult economic and health conditions.

The Gibbons Distressed Situations Team stands ready to assist. If you have any questions regarding the above issues, please contact Frank Cannone. In addition, we will continue to monitor the coronavirus situation and update you accordingly.

More in the “Coronavirus and Your Business” Series: