The Bankruptcy Handbook for Franchisors and Franchisees, published by the American Bar Association Forum on Franchising, is now in print. The book was co-edited by Jason B. Binford, who is also a co-author of the chapter on bankruptcy sales. Mr. Binford is a Dallas-based partner in the firm’s Bankruptcy & Reorganizations and Distribution & Franchise Practice Groups. This one-of-a-kind book brings together the expertise of 25 attorney authors to provide practical and comprehensive guidance on the complicated intersections between financial workouts (including bankruptcy) and franchise law.
Binford’s chapter on bankruptcy sales (commonly referred to as 363 sales) highlights the importance of 363 sales in Chapter 11 bankruptcy practice. Chapter 11 was originally designed as a means of financial reorganization via a plan of reorganization, allowing a company to emerge from bankruptcy free from its burdensome pre-bankruptcy debts and obligations. While Chapter 11 plans still serve this purpose, it has become increasingly common for debtors to use the bankruptcy process to sell the business as a going-concern via a 363 sale process. The reason: cost. A Chapter 11 plan may take many months to formulate, file, and take to confirmation; a 363 sale, in contrast, is faster and can be much less complicated. The bankruptcy sale chapter of the book discusses 363 sales in detail, including the procedural requirements for a sale and the legal standard for approval. The chapter also walks the reader through a typical auction process, including bidding procedures, stalking horse protections, and credit bidding, and it concludes with how the franchisor/franchisee relationship can be affected during the course of a 363 sale.
In addition to bankruptcy sales, the 320-page book covers the following topics:
The Bankruptcy Handbook for Franchisors and Franchisees is an essential reference to all parties in the franchise and distribution industries, whether dealing with financial distress, themselves, or dealing with other parties in financial distress. Foley & Lardner LLP is proud to have been an integral part in developing this scholarly – and practical – resource. For more information, click here.