Chafetz helps businesses navigate financial straits

Feature profile in Emphasis on Public Companies for The Memphis Daily News

Oct. 26, 2013

When the economy took a swan dive five years ago, many companies found themselves on the bargain basement rack.

They weren’t all eager to be sold, however, nor were those flush with cash willing to immediately open the corporate pocketbook.

“On both sides there has been wariness,” said Sam Chafetz, a shareholder with Baker, Donelson, Bearman, Caldwell & Berkowitz PC, who helps companies both public and private navigate such prickly pathways.

Chafetz said the wariness from both parties is understandable.

On the buyer’s side, there is the need for assurance that the company being looked at for purchase is able to weather a recession. Such a buyer has also been holding onto cash to ensure surviving the recession in good form. Yet it also understands that prices for companies have dropped, tremendously in some cases, and it wants to take advantage of the bargains.

At the same time, the seller is wondering why it should let itself go at such deep discounts and are hoping to wait out the recession for a chance at better pricing as competitors fold. These sellers know that companies hoarding cash for purchases will be anxious to make up for lost time.

“Now we’re in the position where sellers, having climbed out of the recession, have an immediate past history of relatively poor results and want to be able to show at least a year or two of good results so they can get the best prices possible,” Chafetz said. “Indeed, some competitors have been wiped out and those that have survived, and survived well, will get much richer prices than they would have gotten during the recession.”

Chafetz was born and raised in Memphis and went to the University of Michigan for undergraduate studies followed by Harvard Law School. He practiced in New York City before returning to Memphis to work as in-house counsel for Cook Industries, then the world’s largest cotton trading company and the world’s third-largest grain trading company. From there he went to work for Waring Cox for 30 years, joining Baker Donelson in 2000 . . . (read more)