Selling a struggling company against a deadline that would not move

The situation

What Minh was afraid of, when he first described the deal to us, was not losing money on the sale. It was losing the company entirely, with nothing to show for the decade he had spent building it, if the transaction did not close before a specific date roughly ten weeks out.

Minh had trained as an architect before founding a company that designed and supplied specialized building components, and he had grown it into a business generating tens of millions in annual revenue at its peak. By the time he came to us, revenue was declining, a combination of two large clients moving work in-house and rising material costs the company had not been able to pass on quickly enough. The business was still viable, but its trend line was pointed the wrong way, and everyone involved in the sale knew it.

A buyer had come forward willing to pay in the thirty-to-fifty-million-dollar range, a fair number given the company's underlying value even with the recent softness, but the offer came with a hard condition: it had to close before the buyer's own financing commitment expired, a date its lender would not extend. That gave the deal roughly ten weeks from letter of intent to closing, an aggressive timeline for a transaction of this size even under ideal conditions.

Minh's sales director, Anahit, who had run day-to-day operations through the downturn and knew the client relationships better than anyone, was blunt about what a missed deadline would mean. If the buyer's financing lapsed and the deal fell apart, the company would likely need to raise a new sale process from a weaker negative position, with worse numbers to show a new buyer six months later. Aram, representing the buyer, made the same point from the other side: this was the buyer's number, on this timeline, and not open to renegotiation if it slipped.

Minh had built the company around his original training as an architect, applying a level of technical precision to the components business that had won it a reputation in a fairly narrow industry niche. That reputation was part of what made the company worth thirty-to-fifty million dollars even with revenue softening, and it was exactly the kind of value that would be much harder to convey to a new buyer starting from scratch six months later, after two more quarters of declining numbers had gone by. The fear Minh described was less about the money on the table and more about what would be left to sell if this particular window closed.

Where it went wrong

The complication surfaced about two weeks into the process, once our transaction team started structuring how the deal would actually complete. The buyer's preferred structure combined a share purchase with a court-approved plan of arrangement, a mechanism that lets a company restructure its share capital and settle claims from multiple parties in a single coordinated court process rather than negotiating each one separately. Given the number of moving pieces, including two secured creditors who needed to be dealt with as part of closing, an arrangement was genuinely the cleanest way to get this done inside ten weeks.

The problem was that the company had originally been incorporated in a jurisdiction whose corporate statute did not offer an arrangement mechanism suited to a transaction of this shape. Getting court approval for the kind of coordinated restructuring the deal required was not realistically achievable there inside the timeline available, given how that jurisdiction's process worked. Discovering this two weeks into a ten-week window was not a small setback. It meant the transaction structure everyone had been planning around was not actually available where the company legally lived.

The alternative some on the deal team floated first was to abandon the arrangement structure entirely and try to close the sale through a series of separate agreements with each creditor and shareholder instead. We advised against it. Negotiating each of those agreements individually, on a deadline this tight, created far more risk of one party holding out or one negotiation running long than the arrangement process itself did, even with the jurisdictional problem still unsolved.

There was a second option: move the company. Ontario's corporate statute allows a corporation from another jurisdiction to continue into Ontario, but only if the laws of its current home jurisdiction permit it to leave and the necessary Ontario approval is obtained. Where those conditions are met, the corporation carries on as the same legal entity, with its existence, contracts and assets intact — though individual contracts can still have their own provisions triggered by a change of jurisdiction, which is exactly what would need to be checked before relying on the option. Once continued, the company could use Ontario's arrangement provisions, which were well suited to exactly the multi-party restructuring this deal needed.

This was not a step anyone on the deal, including Minh, had encountered before, and it took some explaining before he was comfortable with it. He asked, reasonably, whether moving the company's legal home in the middle of a live sale process created its own risks, whether creditors or the buyer might object, or whether the change itself might trigger some clause buried in an existing contract. Those were fair questions, and they were exactly the ones our office needed to answer before recommending the continuance as the path forward rather than simply the fastest one.

What we did

1. Confirmed continuance into Ontario was legally available for this company, checking its constating documents and the export requirements of its original jurisdiction, since not every corporation is free to continue elsewhere without meeting specific conditions first. It was available here, which made the rest of the plan possible, and it removed the need to consider slower, riskier alternatives.
2. Filed the continuance application on an expedited basis, coordinating with counsel in the company's original jurisdiction to obtain the authorization to leave that jurisdiction at the same time we prepared Ontario's continuance documents, so the two steps ran in parallel rather than one after the other. Running the two processes together, rather than waiting for one to finish before starting the next, was what made the compressed timeline realistic at all.
3. Confirmed the continuance would not disturb existing contracts or security, reviewing the company's material agreements and its secured lending arrangements for any clause that treated a change of incorporating jurisdiction as a default or trigger event. None did, but this had to be checked before, not after, filing, since discovering a problem afterward would have been far harder to unwind.
4. Restructured the transaction timeline around the continuance, building the few days the filing would take into the ten-week schedule and moving up other due diligence work to run concurrently rather than in sequence, to avoid losing time waiting for the continuance to complete. This meant reordering tasks the deal team had originally planned to run one after another, which required buy-in from both sides' advisors.
5. Prepared the plan of arrangement application under Ontario's provisions once the continuance was effective, coordinating with the two secured creditors so their claims were addressed within a single court process rather than through separate side negotiations that could each run on their own timeline. Each creditor needed the arrangement's treatment of its security spelled out clearly enough to consent without a lengthy review, since a holdout from either one could have stalled the application. Bringing both into one process was what kept the arrangement on schedule.
6. Kept the buyer's counsel, Aram, informed at each stage, sharing the revised structure and timeline as soon as it was set, since the buyer's own financing deadline meant it needed confidence the new plan would actually land on time, not just an assurance that it would. Regular updates meant the buyer never had a reason to consider walking away over uncertainty about the process.
7. Sought court approval for the arrangement on an expedited hearing schedule, given the transaction deadline, filing evidence that set out the buyer's financing expiry date and what would happen to the deal and creditors if the hearing ran on a normal timeline. The evidence needed to be specific about those consequences, not a general request for speed, since a court weighing an expedited date needs a concrete reason to move ahead of its ordinary schedule. The approach worked: a hearing date was secured well inside the ten-week window.
8. Prepared closing documentation for both entities in parallel with the arrangement application itself, so that once court approval was granted there was no additional delay drafting the transfer documents the sale still required. This last step of preparation running alongside the court process, rather than after it, was what let the closing happen within days of approval rather than weeks.

The outcome

The continuance was completed within days, and the arrangement application followed shortly after. The court approved the plan, the secured creditors' claims were resolved within it as intended, and the share sale closed roughly a week before the buyer's financing deadline, with days rather than weeks to spare.

The purchase price landed within the thirty-to-fifty-million-dollar range originally discussed, close to the figure first proposed despite the company's declining revenue trend, because the buyer had already priced that softness into its offer before the structural problem emerged. Minh did not have to renegotiate the price to buy more time, which was the outcome he had been most afraid of when the jurisdictional issue first came to light.

Anahit stayed on with the business through the transition under an arrangement the new owner wanted, given her knowledge of the client relationships that had kept the company's remaining revenue intact through the downturn. For Minh, the deal closing on schedule meant the company's decade of work translated into a real return rather than a distressed sale forced by a missed deadline, and he has since said the continuance, a step he had never heard of before this transaction, was the single decision that kept the deal alive.

The compressed timeline left little room for error at any stage, and there were moments, particularly while waiting for confirmation that the original jurisdiction had authorized the company's departure, when the schedule looked genuinely at risk. Running the continuance and the arrangement preparation in parallel rather than sequentially was what absorbed that risk without pushing the closing date back. Had either process been allowed to run at its own pace, the deal would very likely have missed the buyer's financing deadline regardless of how strong the underlying transaction terms were.

The lesson Minh took from the experience was not that every sale needs a continuance, since most transactions never encounter this particular obstacle at all. It was that the jurisdiction question is worth asking early, well before a tight deadline forces it to be answered in a hurry, because by the time it surfaces on its own, there may be very little runway left to fix it.

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