Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Is Chapter 11 Bankruptcy an Option for Blackberry?
Author: Joel R. Glucksman
Date: October 10, 2013
Key Contacts
Back
Blackberry Ltd. has fallen on difficult times, and if its ongoing bid to find a buyer to take the company private fails, some analysts speculate that the company may be forced to reorganize under Chapter 11 of the bankruptcy law.
Currently, the smartphone maker is negotiating a potential deal with Canadian insurance and investment company Fairfax Financial Holdings, which has made a $4.7 billion bid for Blackberry. Fairfax currently owns roughly 10 percent of Blackberry’s common shares. However, there is some skepticism as to whether Fairfax will be able to close the deal. The investment firm submitted a letter of intent to acquire the company, but has yet to line up the necessary financing to make the purchase.
Blackberry’s patents and licenses are currently valued at roughly $2.8 billion, leaving Fairfax to borrow roughly $2 billion to fund the buyout, Bloomberg reports.
Blackberry has been on the decline for several years, particularly as it failed to introduce new innovations or features at the same time that the iPhone was rising in popularity. The company’s cash balance plummeted $500 million to $2.6 billion last quarter, and the company is expected to pose a quarterly loss of nearly $1 billion during the fourth quarter of this year. In addition, the smartphone maker said it planned to lay off roughly 40 percent of its workforce, or 4,500 people.
The company’s weakened financial position has caused its credit profile to mirror that of a junk-rated company, Bloomberg notes. Marc Gross, a financial manager at RS Investments, told the news source that investors are only likely to purchase debt if it’s backed by Blackberry’s patents – currently its most lucrative assets – and even this scenario may depend on how much they could recover should the company seek bankruptcy protection.
- Practices: Corporate Transactions & Business, Bankruptcy & Creditors' Rights, Bankruptcy Litigation
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
BESS Interconnection: Managing Grid, Cost, and Schedule Risk
For battery energy storage system (BESS) developers, securing equipment and site control is only part of the development equation. A project must also connect to the electric grid, and increasingly, BESS interconnection is one of the biggest sources of schedule, cost, and contractual risk. Key Takeaways This article is Part 3 of our Battery Storage […]
Author: Nicholas Wall
Navigating Director and Officer Liability in Times of Financial Distress
Director and officer liability increases sharply when a company is in financial distress. Decisions that would draw little attention in a healthy business can later be challenged by creditors, shareholders, bankruptcy trustees, and regulators as breaches of fiduciary duty, fraudulent transfers, or oversight failures. Understanding where that exposure comes from, and how to manage it, […]
Author: Michael Mietlicki
Before You Buy: Managing Real Estate and Permitting Risk for BESS Projects in New York and New Jersey
For developers pursuing battery energy storage system (BESS) projects, finding the right property is only the beginning. BESS site selection is as much a legal and transactional exercise as a real estate decision, with risk analysis central to the project’s ultimate success. Key Takeaways The core questions for BESS site selection in New York and […]
Author: Nicholas Wall
What Business Owners Get Wrong Before Meeting a Litigation Attorney
What should you expect when meeting a litigation attorney about a business dispute? You should expect to describe the dispute in your own words, hand over the most important documents, flag any deadlines or immediate threats, and leave with a clearer picture of the problem, what information is still needed, and the likely next steps. […]
Author: Michael Mietlicki
Arbitration vs. Litigation vs. Mediation: What New Jersey Businesses Should Know Before Signing a Contract
Arbitration resolves disputes privately before an arbitrator whose decision is usually final, while litigation resolves them in court with full rights of appeal. Whether a business ends up in arbitration or litigation is often decided when it signs the contract, long before any dispute arises. Key Takeaways When facing a contract dispute, carefully consider your […]
Author: Graham Staton
Can You Own Part of a New Jersey Business Without a Written Agreement?
Can you own part of a business in New Jersey without a written agreement? Yes, it is possible. Under New Jersey’s Uniform Partnership Act, a partnership can arise when two or more people carry on a business as co-owners for profit, whether or not they ever intended to form one. Ownership doesn’t necessarily depend on […]
Author: Michael Mietlicki
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.