Buying a business solely through the purchase of the assets ensures that you don’t also acquire the liabilities and proverbial “skeletons in the closet.” Here’s how it’s done.
No matter how good we are at underwriting or how efficient we are at due diligence, target businesses in the distressed arena are risky prospects due to their subordinate debt schedules. The Article 9 short sale eliminates subordinate liens and creditor consents, creating opportunities to acquire the business’ assets free and clear of debts and encumbrances.