Mimi Wu, a Partner at Sullivan & Cromwell, specializes in distressed M&A, having tackled notable restructurings like FTX and Silicon Valley Bank. She breaks down the intricacies of Chapter 11 bankruptcy and explains the benefits of 363 sales, where buyers can secure assets without inherited liabilities. Mimi also shares strategies for engaging creditors during tough negotiations and highlights how investors can spot lucrative distressed deal opportunities before they go to auction. This conversation is filled with invaluable insights for anyone navigating financial turmoil in business.
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insights INSIGHT
Distressed vs. Restructuring
Distressed and restructuring are used interchangeably but have slight differences.
Restructuring, often through Chapter 11, is a specific type of distress response.
insights INSIGHT
363 Asset Sale
A 363 sale, referring to Section 363 of the bankruptcy code, is a valuable tool in distressed M&A.
It allows buyers to acquire assets "free and clear" of existing liens and liabilities.
insights INSIGHT
Reasons for Distress
Companies face distress due to excessive debt, operational liabilities, or declining businesses.
Examples include struggling retailers with high lease obligations or businesses with shrinking markets.
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When a company is struggling financially, M&A can be a lifeline—but navigating distressed deals is a whole different game. In this episode of the M&A Science Podcast, Mimi Wu, Partner at Sullivan & Cromwell, breaks down how Chapter 11 bankruptcy, 363 sales, and creditor negotiations come into play when businesses are in distress.
Mimi has worked on some of the biggest restructuring cases, including FTX and Silicon Valley Bank, and she’s here to explain how distressed M&A really works—without the legal jargon. Whether you’re an investor, a corporate executive, or just curious about how companies handle financial trouble, this episode is packed with insights.
Things you will learn:
What is Chapter 11? – How bankruptcy protects businesses and gives them time to reorganize
The Power of a 363 Sale – Why buyers love these deals and how they can acquire assets “free and clear”
Negotiating with Creditors – What happens when companies can’t pay their debts, and the options they have
Finding Deals in Bankruptcy – How investors and buyers can identify distressed M&A opportunities before they hit the auction stage
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Trailer Timestamps:
[00:03:01] – What is Distressed M&A? Key Differences from Traditional M&A
[00:05:32] – Chapter 11 Bankruptcy: How It Works and When to Use It
[00:06:30] – 363 Asset Sales: Selling a Business in Bankruptcy
[00:09:11] – Why Companies File for Bankruptcy: Common Triggers
[00:10:36] – The Automatic Stay: Protecting Companies During Bankruptcy
[00:14:00] – Alternatives to Bankruptcy: Negotiating with Creditors & Raising Capital
[00:18:30] – How the Bankruptcy Sale Process Works: Auctions & Market Checks
[00:20:41] – Credit Bidding & How Creditors Influence the Sale
[00:24:02] – The 363 Auction Process: How Bidding Works
[00:26:39] – Stalking Horse Bids: What They Are & How They Work
[00:29:30] – How Sale Proceeds Are Distributed Among Creditors
[00:33:00] – Case Study: Carrier & Ketafenol Bankruptcy Sale
M&A Science