‘Seller Capitulation’ Fueling Increase in Sale Of Energy Sector Assets: Locke Lord LLP

BOSTON, July 24, 2015 – Signs of an increase in “seller capitulation” – an uptick in bankruptcy filings, increased concerns about liquidity and access to capital, continued pricing pressure – are motivating potential sellers to unload assets or businesses in order to pay down debt and increase liquidity, said Locke Lord Partners Bill Swanstrom during a program in the Firm’s Boston office on Thursday that addressed financial distress in the energy sector.

“That’s the good news for potential buyers of companies,” said Swanstrom, who is Co-Chair of Locke Lord’s Energy Practice Group. “The challenge for buyers, as always in these situations, is deciphering whether they are buying a ‘falling knife,’ or instead are buying quality companies or assets at attractive prices, with the opportunity to generate a significant upside.”

Adding to that challenge is the fact that downturns tend to result in more litigation risk, more employment-related claims and more counterparty credit-risk. Careful due diligence by buyers can help mitigate that risk, as can strong indemnities and – increasingly – rep and warranty insurance products, Swanstrom added.

A Q&A Series package on “Financial Distress in the Energy Sector” – pulled from the Boston event on Thursday -- includes the following features from Swanstrom, as well as from Karl Fryzel, Co-Chair of Locke Lord’s Tax Department, and Bankruptcy, Restructuring & Insolvency Partners Rick Kuebel and Jonathan Young.

• ‘Seller Capitulation’ Fueling Increase in Sale of Energy Assets by Bill Swanstrom
• Tax Planning When Investing in Distressed Assets by Karl Fryzel
• Drop in Commodity Pricing, Liquidity Drives ‘Upstream’ Bankruptcy Filings by Rick Kuebel and Jonathan Young

About Locke Lord LLP
Locke Lord is a full-service, international law Firm of 23 offices designed to meet clients’ needs around the world. With a combined history of more than 125 years and a greatly enhanced domestic and global footprint, Locke Lord is a worldwide leader in the middle market sector. Locke Lord advises clients across a broad spectrum of industries including energy, insurance and reinsurance, private equity, telecommunications, technology, real estate, financial services and health care and life sciences, while providing a wealth of experience through its complex litigation, regulatory, intellectual property and fund formation teams.