What is a stalking horse purchase agreement?

A stalking-horse bid is an initial bid on the assets of a bankrupt company. … The stalking horse sets the low-end bidding bar so that other bidders can not underbid the purchase price. The term “stalking horse” originates from a hunter trying to conceal himself behind either a real or fake horse.

Is a stalking horse bid binding?

To compensate the stalking horse for its time and effort, certain incentives are typically negotiated, subject to bankruptcy court approval. … That way, the debtor’s agreement to bidding incentives is binding on the debtor at the time it signs the purchase agreement, not later upon bankruptcy approval of such incentives.

What does the phrase stalking horse mean?

1 : a horse or a figure like a horse behind which a hunter stalks game. 2 : something used to mask a purpose. 3 : a candidate put forward to divide the opposition or to conceal someone’s real candidacy.

What is a stalking horse takeover?

“STALKING HORSE BIDS” The CCAA regime allows the purchase of assets by what is known as a “stalking horse bid.” This approach is well-known in the United States, but relatively new in Canada. … The practice of DIP financing began originally through the exercise of the broad discretion given to the courts under the CCAA.

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What is a dark horse bid?

Process. An investor can make an offer to purchase an asset or company through the bankruptcy court by making a stalking horse bid. … In the event that bid is not the winning bid, then the investor may request a breakup fee.

How do you become a stalking horse bidder?

To secure a stalking horse offer, the debtor can offer bidding protections such as breakup fees to its best bidder before the auction. These incentives enhance the value of the offering for the bidder, which might lead to a better price offer before the auction begins.

How does a 363 sale work?

A 363 Sale refers to the sale of an organization’s assets. … The bankruptcy court grants the debtor-in-possession or trustee the power to sell the organization’s assets even when there is an objection from junior creditors. Also referred to as subordinated debt, after a court hearing of their petition.

What is a stalking?

Stalking is behavior wherein an individual willfully and repeatedly engages in a knowing course of harassing conduct directed at another person, which reasonably and seriously alarms, torments, or terrorizes that person. Stalking involves one person’s obsessive behavior toward another person.

What is the meaning of all and sundry?

formal. : every person It was clear to all and sundry that something was wrong.

What is a Pretence?

1 : a claim made or implied especially : one not supported by fact. 2a : mere ostentation : pretentiousness confuse dignity with pomposity and pretense— Bennett Cerf. b : a pretentious act or assertion. 3 : an inadequate or insincere attempt to attain a certain condition or quality.

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How does a stalking horse work?

A stalking-horse bid is an initial bid on the assets of a bankrupt company. The bankrupt company will choose an entity from a pool of bidders who will make the first bid on the firm’s remaining assets. The stalking horse sets the low-end bidding bar so that other bidders can not underbid the purchase price.

What is a topping fee?

In a 363 auction a type of break-up fee that the debtor agrees to pay to an initial proposed purchaser (the stalking horse) if the proposed purchaser is not the prevailing bidder in the auction.

What is a dark horse?

A dark horse is a previously less known person or thing that emerges to prominence in a situation, especially in a competition involving multiple rivals, or a contestant that on paper should be unlikely to succeed but yet still might.

What is a credit bid?

Credit bidding is a mechanism, enshrined in the US bankruptcy legislation, whereby a secured creditor can ‘bid’ the amount of its secured debt, as consideration for the purchase of the assets over which it holds security.

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