Volume 8: Issue 3
Premature Recognition: Isn't There A Better Way?
How many times do labor lawyers see this? Company A is interested in purchasing Company B or a portion of it. The prospective buyer may be seeking to expand its business, its product lines, its capacity, or to acquire strategic customers. It has the cash or fi nancing to do so. Target Company B seeks to exit a business or a portion of it, discontinue production of a product, or raise cash. It, too, may be motivated by a variety of strategic or financial reasons. Often there is financial distress or some other urgency. The seller may be in Chapter 11 bankruptcy reorganization, perhaps contemplating an auction sale supervised by the bankruptcy court under Section 363 of the Bankruptcy Code. The employees of the seller for many years have been represented by a particular union. The seller may have been suffering losses, its market may have contracted, capital investment may be needed, and/or it may be suff ering financially from restrictive and costly labor agreements and pension liabilities....