#cannabisindustry – “Out-of-court workout checks the most boxes and does so at a moderate price. It is predicated on there being some sense of good faith between the debtor and the creditors, as it does not involve hiring a third party to arbitrate.
“A workout is [a] non-judicial process through which a financially distressed company can negotiate with its creditors to restructure the amount or repayment terms of debt,” according to the website of U.S. law firm Fox Rothschild, which has a cannabis practice. “A successful workout can enable a company to continue to operate with the same management.”
Receivership can accomplish everything that a workout can, but is also the most expensive option according to UnitedCMC, which acts as a receiver for distressed businesses. Typically, the court appoints a receiver at the request of the creditors.”