Law Office of Paul Petrillo
Contact Us Today 603-635-4149
Menu Contact

Creditors and others claim inside dealing in bankruptcy buyout

Filing for Chapter 11 bankruptcy is a way that businesses in serious debt crisis can restructure finances, settle debts and often return to business intact. How a Chapter 11 filing shakes out depends heavily on numerous legal and financial factors, and every case is unique. Working with experienced professionals who know the ins and outs of business bankruptcy can make a big difference in how successful the outcome actually is.

One New Hampshire company is currently embroiled in the complexity that is Chapter 11 bankruptcy. The company, Performance Sports Group, filed Chapter 11 after a string of financial woes caused it to default on loans in October. Those issues includes filings against the company, audit issues and filing delays, all of which contributed to a need to restructure.

In the case of PSG, the largest shareholder did make a bid to purchase the company. The bid was for $575 million with an additional $361 million in financing. That money would pay off secured creditors and even pay some toward unsecured debts and leave the overall company intact.

Creditors and shareholders are crying foul. While other bidders are free to make an offer, they have to get it in by Jan. 4 because the auction is Jan. 9. The shareholders, creditors and bankruptcy trustee are claiming this creates bias for the current bidder. They also claim favoritism and insider dealings.

PSG presented arguments against these claims, noting that the bidder wasn't considered an insider under American law and even if it was, the negotiations were handled at "arm's length." PSG claimed the negotiations were intense and not all in the bidder's favor.

This case is a great example of how many considerations must be dealt with when filing for Chapter 11 bankruptcy. By working early in the process with the right lawyers, you can get ahead of certain issues and keep your reorganization on track.

Source: NH Business Review, "Performance Sports Group, creditors edge toward bankruptcy deal," Bob Sanders, Nov. 29, 2016

No Comments

Leave a comment
Comment Information

Start Your Case Today

Whether you have a family law issue, an estate planning question or are considering bankruptcy, I can help you find a sustainable solution that provides relief and hope. Schedule your consultation at my Nashua, New Hampshire office today by calling 603-635-4149 or by sending us an email.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

email us for a response
Law Office of Paul Petrillo