{"id":4664,"date":"2018-04-11T21:00:10","date_gmt":"2018-04-12T01:00:10","guid":{"rendered":"http:\/\/www.irasmithinc.com\/blog\/?p=4664"},"modified":"2018-04-11T21:56:10","modified_gmt":"2018-04-12T01:56:10","slug":"stalking-horse-credit-bid","status":"publish","type":"post","link":"https:\/\/irasmithinc.com\/blog\/stalking-horse-credit-bid\/","title":{"rendered":"STALKING HORSE CREDIT BID: WE NEED COURT APPROVAL BEFORE STARTING A COURT SUPERVISED SALES PROCESS"},"content":{"rendered":"<div style=\"width: 1920px; max-width: 100%; margin: auto; clear: both;\">\n<div style=\"position: relative; padding-bottom: 56.25%; height: 0; overflow: hidden;\"><iframe loading=\"lazy\" style=\"position: absolute; top: 0; left: 0; width: 100%; height: 100%; padding: 0px; margin: 0px;\" src=\"\/\/snakeplayer.com\/watch?v=aXJhX3NtaXRoLTEwOA\" width=\"1920\" height=\"1080\" frameborder=\"0\" scrolling=\"no\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/div>\n<div><img decoding=\"async\" style=\"width: 100%; height: auto; float: left; padding: 0px; margin: 0px; border: 0px;\" src=\"\/\/snakeplayer.com\/watch\/img\/shadows\/2-1920x1080.png\" alt=\"\" title=\"\"><\/div>\n<\/div>\n<h2 id='stalking-horse-credit-bid-introduction'  id=\"boomdevs_1\"><span style=\"color: #00ccff;\"><b>Stalking horse credit bid: \u00a0Introduction<\/b><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">In last week\u2019s vlog, \u201c<\/span><a href=\"http:\/\/www.irasmithinc.com\/blog\/stalking-horse-asset-purchase-agreement\/\"><span style=\"font-weight: 400;\">STALKING HORSE ASSET PURCHASE AGREEMENT: THE WEINSTEIN COMPANY GALLOPS INTO A COURT SUPERVISED SALES PROCESS<\/span><\/a><span style=\"font-weight: 400;\">\u201c, I described what a stalking horse asset purchase agreement is. \u00a0I also defined and described the proposed stalking horse credit bid process of The Weinstein Company. \u00a0That<\/span><a href=\"https:\/\/www.theglobeandmail.com\/globe-investor\/investor-education\/whats-a-stalking-horse-bid\/article4288100\/\" target=\"_blank\" rel=\"noopener\"> <span style=\"font-weight: 400;\">process<\/span><\/a><span style=\"font-weight: 400;\"> was approved last Friday by a Delaware bankruptcy judge. \u00a0The Court delayed the court sales auction by a couple of business days to May 4, 2018.<\/span><\/p>\n<h2 id='stalking-horse-credit-bid-our-earlier-case-studies'  id=\"boomdevs_2\"><span style=\"color: #00ccff;\"><b>Stalking horse credit bid: \u00a0Our earlier case studies<\/b><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Over the last few weeks, I have provided some case studies from our files for both personal and corporate insolvency matters. \u00a0As a refresher, these case study vlogs are:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><a href=\"http:\/\/www.irasmithinc.com\/blog\/claim-bankruptcy-in-ontario\/\"><span style=\"font-weight: 400;\">CLAIM BANKRUPTCY IN ONTARIO CASE STUDY: SHE REALLY WANTED TO BUT WE STOPPED HER AND SOLVED HER PROBLEMS<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\"><a href=\"http:\/\/www.irasmithinc.com\/blog\/court-appointed-estate-trustee\/\"><span style=\"font-weight: 400;\">COURT APPOINTED ESTATE TRUSTEE CASE STUDY: IF IT WAS EASY YOU WOULDN\u2019T NEED US<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\"><a href=\"http:\/\/www.irasmithinc.com\/blog\/company-restructuring-process\/\"><span style=\"font-weight: 400;\">COMPANY RESTRUCTURING PROCESS CASE STUDY: \u00a0HOW WE USED BUSINESS RESTRUCTURING IN CANADA TO SAVE THE BUSINESS AND JOBS<\/span><\/a><\/li>\n<\/ul>\n<h2 id='stalking-horse-credit-bid-our-stalking-horse-sales-process-case-study'  id=\"boomdevs_3\"><span style=\"color: #00ccff;\"><b>Stalking horse credit bid: \u00a0Our stalking horse sales process case study<\/b><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">This is the last vlog along our case study theme. \u00a0The purpose is to show the decision making that the Court goes through in being asked to approve a stalking horse credit bid and a stalking horse sales process in a <\/span><a href=\"http:\/\/www.irasmithinc.com\/bankruptcy_services-corporate.html\"><span style=\"font-weight: 400;\">corporate insolvency<\/span><\/a><span style=\"font-weight: 400;\"> file.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">We were Court-appointed as <\/span><a href=\"http:\/\/www.irasmithinc.com\/bankruptcy_services-corporate_receivership-and-bankruptcy.html\"><span style=\"font-weight: 400;\">Receiver and Manager<\/span><\/a><span style=\"font-weight: 400;\"> of a club operating a \u00a0<\/span><a href=\"http:\/\/www.irasmithinc.com\/case_studies\/settlers_ghost_golf\/index.html\"><span style=\"font-weight: 400;\">golf course<\/span><\/a><span style=\"font-weight: 400;\">, restaurant and party function business. \u00a0The first secured creditor filed its motion to appoint us. \u00a0We were appointed very close to <\/span><a href=\"http:\/\/www.irasmithinc.com\/blog\/credit-card-debt-trap-becoming-credit-card-debt-free\/\"><span style=\"font-weight: 400;\">Christmas<\/span><\/a><span style=\"font-weight: 400;\"> that year. Obviously, the golf course was not operating at the time of our appointment. The food and beverage facilities only had one remaining Christmas party and the annual club New Year\u2019s party. \u00a0No parties were booked yet into the <\/span><a href=\"http:\/\/www.irasmithinc.com\/blog\/video-new-years-debt-resolution-3-simple-steps-to-achieve-success\/\"><span style=\"font-weight: 400;\">New Year<\/span><\/a><span style=\"font-weight: 400;\">.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">We did the normal things a Receiver does such as:<\/span><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\"> taking physical possession of the premises and the books and records;<\/span><\/li>\n<li><span style=\"font-weight: 400;\">identifying if there were any assets located off premises; and <\/span><\/li>\n<li><span style=\"font-weight: 400;\">arranging for property and liability insurance. \u00a0<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">We were able to use the time to understand the business and the nature and extent of the assets.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">There was already a purchaser ready to give an offer to purchase the Receiver\u2019s right, title and interest in the operating assets comprising the club\u2019s businesses. We arranged for an appraisal of the assets and business. We received and reviewed the appraisal.\u00a0 The secured creditor told us the form of offer they would support.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Armed with the appraisal information and the secured creditor information, we entered into a conversation with the potential purchaser.\u00a0 The amount this purchaser told us it was willing to pay was\u00a0 far more than appraised value and above the minimum threshold for acceptance from the secured creditor.<\/span><\/p>\n<h2 id='stalking-horse-credit-bid-our-stalking-horse-offer'  id=\"boomdevs_4\"><span style=\"color: #00ccff;\"><b>Stalking horse credit bid: \u00a0Our stalking horse offer<\/b><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">We decided that a stalking horse bid process would be ideal. \u00a0We doubted that any party would bid higher than the value this potential purchaser was discussing. \u00a0It made sense to also have the court supervised sales process completed prior to April, so that it would be the purchaser opening up and preparing the course for play and running the food and beverage business, rather than the Court appointed Receiver.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The potential purchaser agreed to become a stalking horse bidder and to the timeline. \u00a0We and our legal counsel worked with the potential purchaser and its legal counsel to prepare a draft \u00a0stalking horse asset purchase agreement. The purchase price was the amount this now stalking horse purchaser was always discussing.<\/span><\/p>\n<h2 id='stalking-horse-credit-bid-we-galloped-off-to-court'  id=\"boomdevs_5\"><span style=\"color: #00ccff;\"><b>Stalking horse credit bid: \u00a0We galloped off to Court<\/b><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">We filed our motion for approval of our activities to date, requested permission to enter into the proposed stalking horse agreement and sought approval for our proposed stalking horse sales process. \u00a0The Court had no problem with our activities to date, or the stalking horse agreement, but did not like our truncated stalking horse sales process. We were not able to be in Court until February and we wished to complete the sale by March 31. \u00a0The Court felt that was not enough time to run a sales process that was fair to all potential bidders. Our legal counsel attempted to persuade the Judge that comparing the appraisal (which the Court saw but our purchaser did not see) and the value of the stalking horse offer, we did not feel that there would be any other bidders.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">We could not persuade the Court. \u00a0The Judge approved everything, but he amended the timeline so that we would run a <\/span><a href=\"http:\/\/www.irasmithinc.com\/case_studies\/settlers_ghost_golf\/pdf\/sgg_StalkingHorseSalesProcessApprovalOrder.pdf\"><span style=\"font-weight: 400;\">process<\/span><\/a><span style=\"font-weight: 400;\"> that would last at least 5 weeks from the time we ran our advertisement for this business opportunity.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The Court considers various factors when asked to approve a receivership or bankruptcy sales transaction. \u00a0The basis for this comes from a 1991 Court of Appeal for Ontario decision in<\/span><a href=\"https:\/\/www.canlii.org\/en\/on\/onca\/doc\/1991\/1991canlii2727\/1991canlii2727.html?resultIndex=1\" target=\"_blank\" rel=\"noopener\"> <span style=\"font-weight: 400;\">Royal Bank of Canada v. Soundair Corp., 1991 CanLII 2727 (ON CA)<\/span><\/a><span style=\"font-weight: 400;\">. \u00a0In no particular order, the Court is concerned with:<\/span><\/p>\n<ol>\n<li><span style=\"font-weight: 400;\"> Whether the Receiver has made enough effort to get the best price and has not acted improvidently.<\/span><\/li>\n<li><span style=\"font-weight: 400;\"> Considering the interests of all parties.<\/span><\/li>\n<li><span style=\"font-weight: 400;\"> The efficacy and integrity of the process used to get offers.<\/span><\/li>\n<li><span style=\"font-weight: 400;\"> If there has been unfairness in the working out of the process.<\/span><\/li>\n<\/ol>\n<p><span style=\"font-weight: 400;\">In the Judge\u2019s opinion, a 5 week sales process would ease any concerns he had.<\/span><\/p>\n<figure id=\"attachment_4320\" aria-describedby=\"caption-attachment-4320\" style=\"width: 212px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/www.irasmithinc.com\"><img loading=\"lazy\" decoding=\"async\" class=\"size-medium wp-image-4320\" src=\"http:\/\/www.irasmithinc.com\/blog\/wp-content\/uploads\/2018\/01\/ISI_4-212x300.jpg\" alt=\"\" width=\"212\" height=\"300\" title=\"\" srcset=\"https:\/\/irasmithinc.com\/blog\/wp-content\/uploads\/2018\/01\/ISI_4-212x300.jpg 212w, https:\/\/irasmithinc.com\/blog\/wp-content\/uploads\/2018\/01\/ISI_4-768x1087.jpg 768w, https:\/\/irasmithinc.com\/blog\/wp-content\/uploads\/2018\/01\/ISI_4-723x1024.jpg 723w, https:\/\/irasmithinc.com\/blog\/wp-content\/uploads\/2018\/01\/ISI_4.jpg 904w\" sizes=\"auto, (max-width: 212px) 100vw, 212px\" \/><\/a><figcaption id=\"caption-attachment-4320\" class=\"wp-caption-text\">stalking horse credit bid<\/figcaption><\/figure>\n<h2 id='stalking-horse-credit-bid-the-outcome'  id=\"boomdevs_6\"><span style=\"color: #00ccff;\"><b>Stalking horse credit bid: \u00a0The outcome<\/b><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">We amended our <\/span><a href=\"http:\/\/www.irasmithinc.com\/case_studies\/settlers_ghost_golf\/pdf\/sgg_Terms_and_Conditions_of_Sale.pdf\"><span style=\"font-weight: 400;\">sales process<\/span><\/a><span style=\"font-weight: 400;\"> in accordance with the Judge\u2019s instructions. \u00a0We then:<\/span><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\"> ran the <\/span><a href=\"http:\/\/www.irasmithinc.com\/case_studies\/settlers_ghost_golf\/pdf\/sgg_Advertisement_in_The_Globe_&amp;_Mail_Report_on_Business.pdf\"><span style=\"font-weight: 400;\">advertisement<\/span><\/a><span style=\"font-weight: 400;\"> and issued our preliminary <\/span><a href=\"http:\/\/www.irasmithinc.com\/case_studies\/settlers_ghost_golf\/pdf\/sgg_Purchase_Opportunity_Summary.pdf\"><span style=\"font-weight: 400;\">\u201cteaser\u201d sales document<\/span><\/a><span style=\"font-weight: 400;\"> to all those that requested it; and<\/span><\/li>\n<li>set up our online data room of pertinent business and other information about the assets and business operations.<\/li>\n<\/ul>\n<p>Anyone who wished to do due diligence signed our confidentiality agreement. Everyone who signed our confidentiality agreement was then provided with a unique password to enter the online data room.<\/p>\n<p><span style=\"font-weight: 400;\">The due diligence period ended and since everyone knows the amount of the stalking horse offer, no other potential bidders submitted an offer. \u00a0Nobody wanted to bid more.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">We went back to Court to tell of the results and obtained Court approval to complete the transaction of the stalking horse bidder whose asset purchase agreement was already approved by the Court.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In the meantime, spring had arrived. \u00a0We hired the necessary golf course superintendent and other maintenance and operating staff and opened up the golf course. \u00a0We ran the golf club until the sale was completed near the end of June that same year. In the eyes of the Court fairness was achieved, we operated the golf club and the secured creditor was happy with the result of the sale.<\/span><\/p>\n<h2 id='stalking-horse-credit-bid-is-your-business-facing-financial-problems'  id=\"boomdevs_7\"><span style=\"color: #00ccff;\"><b>Stalking horse credit bid: \u00a0Is your business facing financial problems?<\/b><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">This case study shows how we were able to satisfy all stakeholders in a Court supervised sales process, to transfer the assets to a new business, remit funds to the secured creditor on a basis acceptable to them and meet the requirements of the Court.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Is your business facing financial problems? \u00a0Perhaps your company is in need of a restructuring. \u00a0The Ira Smith Team can develop a restructuring plan which may or may not include the need to file for <\/span><a href=\"http:\/\/www.irasmithinc.com\/bankruptcy_services-corporate_restructuring-and-turnarounds.html\"><span style=\"font-weight: 400;\">bankruptcy protection<\/span><\/a><span style=\"font-weight: 400;\">.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The<\/span><a href=\"http:\/\/www.irasmithinc.com\/\"><span style=\"font-weight: 400;\"> Ira Smith<\/span><\/a><span style=\"font-weight: 400;\"> Trustee &amp; Receiver Inc. Team understands the pain you are going through trying to keep your<\/span><a href=\"http:\/\/www.whatisbankruptcytoronto.com\/corporate\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\"> company<\/span><\/a><span style=\"font-weight: 400;\"> alive while trying to negotiate with potential purchasers. \u00a0We understand that you are playing beat the clock, and the pain and stress you are feeling thinking that you may just run out of time. \u00a0The<\/span><a href=\"http:\/\/www.irasmithinc.com\/bankruptcy_personal.html\"> <span style=\"font-weight: 400;\">bankruptcy<\/span><\/a><span style=\"font-weight: 400;\"> protection process can ease this stress and provide a level playing field so that no potential purchaser takes advantage of you.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The<\/span><a href=\"http:\/\/www.irasmithinc.com\/\"><span style=\"font-weight: 400;\"> Ira Smith<\/span><\/a><span style=\"font-weight: 400;\"> Team has a great deal of experience in running a stalking horse stalking horse asset purchase agreement. \u00a0The stress placed upon you due to your company\u2019s financial challenges is enormous. We understand your pain points. \u00a0<\/span><a href=\"http:\/\/www.irasmithinc.com\/contact_us.html\"><span style=\"font-weight: 400;\">Call the<\/span><\/a><a href=\"http:\/\/www.irasmithinc.com\/\"><span style=\"font-weight: 400;\"> Ira Smith Team<\/span><\/a><span style=\"font-weight: 400;\"> today for your free consultation. \u00a0We can end your pain and put your company back on a healthy profitable path, Starting Over, Starting Now.<\/span><\/p>\n<figure id=\"attachment_4667\" aria-describedby=\"caption-attachment-4667\" style=\"width: 1280px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/www.irasmithinc.com\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-4667\" src=\"http:\/\/www.irasmithinc.com\/blog\/wp-content\/uploads\/2018\/04\/stalking-horse-credit-bid_0.jpg\" alt=\"\" width=\"1280\" height=\"720\" title=\"\" srcset=\"https:\/\/irasmithinc.com\/blog\/wp-content\/uploads\/2018\/04\/stalking-horse-credit-bid_0.jpg 1280w, https:\/\/irasmithinc.com\/blog\/wp-content\/uploads\/2018\/04\/stalking-horse-credit-bid_0-300x169.jpg 300w, https:\/\/irasmithinc.com\/blog\/wp-content\/uploads\/2018\/04\/stalking-horse-credit-bid_0-768x432.jpg 768w, https:\/\/irasmithinc.com\/blog\/wp-content\/uploads\/2018\/04\/stalking-horse-credit-bid_0-1024x576.jpg 1024w, https:\/\/irasmithinc.com\/blog\/wp-content\/uploads\/2018\/04\/stalking-horse-credit-bid_0-500x281.jpg 500w, https:\/\/irasmithinc.com\/blog\/wp-content\/uploads\/2018\/04\/stalking-horse-credit-bid_0-1200x675-cropped.jpg 1200w\" sizes=\"auto, (max-width: 1280px) 100vw, 1280px\" \/><\/a><figcaption id=\"caption-attachment-4667\" class=\"wp-caption-text\">stalking horse credit bid<\/figcaption><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>Stalking horse credit bid: \u00a0Introduction In last week\u2019s vlog, \u201cSTALKING HORSE ASSET PURCHASE AGREEMENT: THE WEINSTEIN COMPANY GALLOPS INTO A COURT SUPERVISED SALES PROCESS\u201c, I described what a stalking horse asset purchase agreement is. \u00a0I also defined and described the proposed stalking horse credit bid process of The Weinstein Company. \u00a0That process was approved last [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[56,680,2446,2452,2508,2494,94,863,688,163,2498,2511,683,2500,2501,2512,2507,2509,2510],"class_list":["post-4664","post","type-post","status-publish","format-standard","hentry","category-brandon-blog-post","tag-bankruptcy-protection","tag-corporate-insolvency","tag-court-appointed","tag-court-appointed-receiver","tag-court-approval","tag-court-supervised-sales-process","tag-insolvency","tag-ira-smith-trustee","tag-personal-insolvency","tag-receiver","tag-sales-process","tag-secured-creditor","tag-stalking-horse","tag-stalking-horse-asset-purchase-agreement","tag-stalking-horse-bid-process","tag-stalking-horse-bidder-whose","tag-stalking-horse-credit-bid","tag-stalking-horse-credit-bid-process","tag-stalking-horse-sales-process"],"_links":{"self":[{"href":"https:\/\/irasmithinc.com\/blog\/wp-json\/wp\/v2\/posts\/4664","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/irasmithinc.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/irasmithinc.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/irasmithinc.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/irasmithinc.com\/blog\/wp-json\/wp\/v2\/comments?post=4664"}],"version-history":[{"count":5,"href":"https:\/\/irasmithinc.com\/blog\/wp-json\/wp\/v2\/posts\/4664\/revisions"}],"predecessor-version":[{"id":4671,"href":"https:\/\/irasmithinc.com\/blog\/wp-json\/wp\/v2\/posts\/4664\/revisions\/4671"}],"wp:attachment":[{"href":"https:\/\/irasmithinc.com\/blog\/wp-json\/wp\/v2\/media?parent=4664"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/irasmithinc.com\/blog\/wp-json\/wp\/v2\/categories?post=4664"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/irasmithinc.com\/blog\/wp-json\/wp\/v2\/tags?post=4664"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}