The current economic environment offers companies with access to cash, financing and strong equity values increased opportunities to seek mergers and acquisitions from distressed businesses. A company filing for bankruptcy is ripe for the picking, with assets or stock others can acquire at discounted values. An in-house counsel’s company can obtain assets at lightning speed, free and clear of liens, claims and encumbrances. But one benefit that may be less apparent to in-house attorneys is this: Governmental approvals of mergers and acquisitions also are shorter in bankruptcy.
The primary purpose of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act), 15 U.S.C. §18a, is to provide the antitrust agencies an opportunity to review mergers and acquisitions before they occur. While the HSR Act imposes a 30-day pre-merger notification and waiting period for reportable nonbankruptcy transactions, a shorter period exists for bankruptcy transactions.
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