01
Choose the legal acquisition route first
Compare a pre-insolvency share deal, an owner asset sale, an insolvency auction, a sale of the enterprise and rescue investment. The route determines seller authority, consents, transferred liabilities and title resilience.
- Pre-insolvency
- More contractual flexibility but greater later challenge risk.
- Auction
- Formal procedure with limited seller warranties.
- Enterprise
- A single property complex with special transfer rules.
- Rescue
- Funding and control are tied to a restructuring plan.
02
Distress due diligence starts with the crisis date
Build a timeline of arrears, asset insufficiency, enforcement, insolvency filings, intragroup payments and asset leakage. Review the claims register, litigation, office-holder reports, public insolvency notices, security and physical possession.
03
Fair value alone does not eliminate challenge risk
Article 61.2 addresses undervalue and creditor-harm transactions; Article 61.3 addresses creditor preference. Document valuation, purpose, payment, knowledge analysis, actual performance and the seller’s use of proceeds.
- Value
- Independent valuation and a documented price process.
- Purpose
- Commercial rationale, alternatives and approvals.
- Payment
- Transparent banking trail without circular funds.
- Knowledge
- Review distress indicators and relationships at signing.
04
In an insolvency auction procedure matters as much as price
Review the approved sale terms, lot, valuation, notices, platform, deposit, bidder qualifications and sale contract. After initial and repeat auctions, assets may move to a public-offer process with successive price reductions.
05
An enterprise sale is not merely a basket of assets
Article 110 defines the enterprise as a property complex used for business. Historic monetary debts and mandatory payments are generally excluded, but transferred rights, current obligations, environmental conditions, restricted assets and tender conditions still require review.
06
Test title to every object in the lot
Reconcile auction descriptions, inventory, registries, cadastre, accounts and physical presence. Analyse real estate, equipment, vehicles, IP, domains, stock and receivables separately: an auction cannot create title the debtor never held.
07
Security shapes both sale mechanics and price distribution
Identify collateral, ranking, secured creditor, injunctions and Article 138 procedure. Confirm release documents, timing of clean title, junior security and registry evidence.
08
A licence rarely follows the asset automatically
For subsoil, finance, telecoms, transport, industrial and other regulated activities, determine whether the permit attaches to the person or asset, whether it can be reissued and whether the buyer qualifies. A licensing plan belongs before the bid.
09
The operating business rests on contracts, not equipment lists
Map customers, suppliers, leases, energy, IT, IP, bank accounts and state contracts. Test assignment bans, change of control, arrears, termination and need for new contracts; produce a Day 1 contract map.
10
People and management need a separate transition plan
Determine whether there is an enterprise transfer, new hiring or seller TSA. Preserve key skills, permits, shifts, payroll, personal data and safety without assuming automatic transfer.
11
Distressed pricing includes the cost of recovery
Add critical arrears, repair, working capital, relicensing, tax, logistics, IT, retention and downtime to the bid. Base, downside and liquidation scenarios define the bid ceiling and liquidity reserve.
12
Closing must leave an auditable chain of title
Retain auction minutes, sale contract, payment evidence, transfer deed, lien releases, registry entries, inventory and access credentials. Insurance, security, accounts, licensing, TSA and counterparty notices start in parallel.
13
Distressed acquisition review pack
Court file; debtor card and public notices; claims register; sale terms; valuation; lot; security and injunctions; title records; licences; material contracts; employees; tax; environmental risk; model; funding; bid and contract draft; Day 1 plan.