November 2, 2009
Buying or Selling a Business in Connecticut
In this unstable and volatile economy we currently live in, the reality of the market is that businesses are being bought and sold at a rapid rate, often for less money than what they would have sold for just a few short years ago, and often for less money than the business's outstanding debts. When you find yourself in a position of buying or selling such a company, you are in the middle of a " short sale."
A commercial short sale occurs when a business is sold and the total purchase price does not cover all the outstanding debts of the business. Though it may seem counterintuitive, short sales often provide win-win solutions for all parties involved, including the seller, the buyer, and the seller's creditors, usually banks, states (back taxes), and other private lenders.
The driving force of commercial short sales is often the seller's attorney who is in the position of brokering agreements among the creditors to convince them to accept less money than they are owed. Creditors will often agree to take such reductions because of the bankruptcy risk. In the event the debtor files for bankruptcy, the entire debt owed to the creditor could be discharged, and everyone agrees that getting something is better than getting nothing. Without a skilled and experienced attorney, however, the seller may not be able to get its creditors to make the necessary concessions and compromises, and the sale can fall through because of this.
The commercial attorneys at Brown Paindiris & Scott are well-versed in commercial and creditor rights law and have a great deal of experience throughout Central Connecticut dealing with short sales, having served as counsel to both buyers and sellers for manufacturing companies, package stores, restaurants, construction companies, wholesale and other retail companies. The firm's long-standing ties to the greater Hartford community have allowed its attorneys, Nicholas Paindiris, Bridget Gallagher and Simon Lebo to develop the requisite skills to successfully complete short sales. Knowing what leverage works against creditors is the key to success.