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The basis of a successful
distressed M&A deal is competent
and realistic business planning.

Selling companies from a crisis situation or insolvency is one of the special challenges in the M&A market. This applies in particular to companies in the printing industry.

Until the German law on the facilitation of the restructuring of enterprises (ESUG came into force in 2012, the distressed M&A area was limited primarily to purchases from insolvency (asset deals) and pre-insolvency transactions that took place under the Damocles sword of the imminent insolvency of the seller in order to avert the corporate crisis. Since the introduction of ESUG, the insolvency area of distressed M&A has become more important  and the insolvency plan procedure now provides access to the membership rights of the shareholders of the insolvent company.

In addition to the classic asset deal with the insolvency administrator, this enables new forms of transaction such as share deals, conversions and debt-to-equity swaps and expands the scope for investors. In addition, investors can exert greater influence on the insolvency proceedings in interaction with the debtor or creditors.

The basis of a successful distressed M&A deal, however, is competent and realistic business planning. Anyone who presents a business plan that is too optimistic will not convince investors.

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