A debtor has a fiduciary duty to maximize the value of the assets of its estate. When selling assets of a bankruptcy estate, the process usually begins with an extensive marketing process.
When to Use a 'Stalking Horse' Agreement
A debtor has a fiduciary duty to maximize the value of the assets of its estate. When selling assets of a bankruptcy estate, the process usually begins with an extensive marketing process. As a result of extensive marketing, a debtor can find itself actively negotiating with numerous potential purchasers. While most marketing periods end with a court-approved auction, it has become commonplace for the debtor to enter into the auction process with a "stalking horse" agreement in place.
By
Adam C. Rogoff And Deborah PiazzaThis premium content is locked for The Bankruptcy Strategist subscribers only
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