M&A Environment in 2012

Legal

We anticipate that 2012 will see more bankruptcy filings as strengthened banks and creditors begin to force the issue. Chapter 11 bankruptcy filings were down 15.9 percent in 2011 when compared to 2010 and down 24.1 percent when compared to 2009. This may seem counterintuitive given the recent economic malaise. Keep in mind bankruptcy is at its definition, protection sought from creditors. If the creditors themselves are unstable, they are less able to make aggressive moves thus driving sale-side activity. Business in the United States has not improved enough to account for the drastic reduction in business bankruptcy filings over the last two years. Expect the stronger banking institutions to aggressively pursue the remedies that they have forgone over the last two years, thus driving more bankruptcy sale/purchase opportunities in 2012.