In today’s high-interest, post-pandemic economy, distressed business sales are becoming increasingly common. From independently owned pharmacies and restaurants to franchise locations and retail operators, many business owners are struggling under the weight of SBA loans, rising costs, regulatory burdens, and reduced margins. As a result, more buyers are eyeing these opportunities as potential value plays. But these transactions come with real legal risk, especially when the sale is “underwater,” meaning liabilities exceed asset value. Whether you are a buyer looking to capitalize on discounted opportunities, or a seller seeking an exit from mounting obligations, understanding how to properly structure a distressed transaction is essential.
