|For buyers, a
deal may involve more risks than meets the eye
Distressed M&A opportunities in Latin America
may not be a sweet as they first appear. Buyers looking to
acquire companies in distress could be left with unexpected
Local counsel have explained that
regulators’ and courts’ approach to
successor liabilities means issues can crop up even when the
target assets are not the original subject of a claim.
The uncertainty this creates has raised concern
that buyers may stay away, or that companies will remain
distressed because of pressure placed on raising new capital.
"If you are buying a company that is in some sort of
distress it’s likely to have contingent
liabilities that you will inherit," said Miguel Tornovsky a
partner with Pinheiro Neto in São Paulo. "In Brazil
there has been a disregard for the legal entity and there is a
risk the buyer will...