Negotiating Break-Up Fees In A Stalking Horse Bid

Law360, New York (January 29, 2010, 4:55 PM EST) -- The term "stalking horse" originally referred to a horse or type of screen a hunter used to conceal his position from intended prey. Today the term takes a new meaning altogether thanks to its application in the bankruptcy context.

A modern day “stalking horse” is an interested buyer of a debtor’s assets who is offered incentives for being the first to announce its intent. As the initial bidder, the stalking horse sets the minimum purchase price and other terms of the transaction.

Often included in the...
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