Anthony Judge offers some practical advice to negotiating the minefield of insolvency purchasing
In this economic climate, property speculators are shopping for cut-price properties being sold by distressed sellers, and we are starting to see insolvency-related sales. When property is marketed by an agent on behalf of an insolvency practitioner (IP) the burden of verification is on the buyer, who must conduct due diligence investigations. Sales particulars from the IP tend to provide little information. A key duty of an IP is to obtain the best price reasonably obtainable for the assets he is selling. IPs frequently conduct parallel negotiations with a number of interested buyers and contract races are not unusual.
THE PURCHASE CONTRACT
The IP’s lawyers will prepare the first draft contract and transfer with no covenants, warranties or indemnities in favour of the buyer. The extent to which this is negotiable will depend on relative bargaining positions. Because title to the assets remains with the company, the company will be the contracting party (acting through the IP as agent). The IP is also
