Bankruptcy and Liquidation
MarcumAsia provides accounting and consulting services for Chinese companies who are involved in the U.S. Chapter 11 or Chapter 7 bankruptcy process, whether as a creditor to a bankrupt U.S. entity, acquirer of distressed assets, or operating a U.S. subsidiary that is undergoing Chapter 11 reorganization.
Bankruptcy is a highly complex and arcane process in which well-informed participants can often capture significant value. Given the interlaced nature of China’s and America’s economy, Chinese companies increasingly are among some of the largest vendors/creditors in U.S. bankruptcies. Asset sales during a restructuring can often provide astute buyers with an opportunity to acquire valuable technology, brands, or physical assets that will make them more globally competitive.
MarcumAsia has extensive experience with the bankruptcy process and can help guide our Chinese clients to successful outcomes.
Acquiring Assets Out of Bankruptcy
MarcumAsia can help Chinese companies who are seeking to purchase distressed assets out of the bankruptcy process. This can include providing reports on the business background and source of funds of the acquirer to the bankruptcy court and creditors committee to performing financial due diligence on the targeted assets. This can include positioning our client as the “stalking horse” in the auction process, which provides advanced access to business information, reimbursement for transaction fees, and a breakup fee if the acquirer is later outbid. By demonstrating the credibility and professionalism of the acquirer, the chances of securing valuable assets on favorable terms greatly increases.
Restructuring of U.S. Operations
In the event that a Chinese company has a U.S. subsidiary that is undergoing restructuring, MarcumAsia can provide highly technical accounting services that are required to preserve value and maintain ongoing operations. Dealing with these complex issues is critical to preserving credibility with the bankruptcy court and creditors, while also preserving relationships with other key stakeholders such as employees and customers.
MarcumAsia can provide comprehensive support both leading up to and during the process of a Chapter 11 filing, including:
- Cash flow monitoring and reporting
- Invoice and payment cut off for managing vendors
- Analysis to support bankruptcy court motions
- Preparation of a creditor matrix
- Preparation of initial operating report to U.S. Trustee
- Claims analysis, management and reporting
- Preparation of U.S. GAAP financials to conform with ACS 852 reorganizations
- Business and asset valuations
- Tax issues related to discharge of indebtedness
- Creditor reporting and communication with creditor groups