Distressed Debt Investing Website 08/09/10 One of the key determinants of recovery in a Chapter 11 bankruptcyor distressed debt situation are the specific guarantees embedded in an indentures of a corporate bond. Like a guarantee on a home purchase or rental agreement, XYZ party guarantees the liability of ABC person. In corporate finance, these guarantees are […]
Distressed Debt Investing 04/13/10 When analyzing a distressed debt investment, it always helps to remember that the presiding judge on a case will be the final arbiter on a number of decisions that may sway the direction of a case and consequently, recovery and return to distressed debt investors. For example, today in Tribune’s bankruptcy, […]
Distressed Debt Investing Website 04/12/10 A pivotal aspect of distressed debt investingis the negotiations among opposing (read: warring) creditor factions. Senior creditors may want one thing, but subordinated bond holders want another. Sometimes people throw the “cram down” rule as a gauntlet in negotiations when in fact they may not even have the necessary stipulations […]
Distressed Debt Investing Website 04/07/10 Grant, a member of the Distressed Debt Investors Club, pens a piece on the advanced distressed debt concept of pre-petition debt reinstatement. Enjoy! Some companies currently experiencing financial distress raised large amounts of debt capital on significantly easier terms during the last decade’s “credit bubble” than they could obtain today. […]
Distressed Debt Investors Website 03/01/10 Grant, a member of the Distressed Debt Investors Club and guest contributor here writes a piece on the advanced distressed investingconcept of intercreditor issues. Enjoy: A feature of the last credit cycle was the growth of 2nd lien financing. While structures involving bank debt, high yield bonds, and/or mezzanine loans also […]
Distressed Debt Investing Website 02/10/10 Grant, a member of the Distressed Debt Investors Club and guest contributor at Distressed Debt Investing writes an interesting piece on tax considerations in restructuring. Enjoy. Some Key Tax Issues in Restructuring Tax considerations can have a material impact on the value of a distressed business. The following contains a brief […]
Distressed Debt Investing Website 12/30/09 A friend asked me my opinion of something Whitney Tilson said in his most recent email regarding GGP. Here is the relevant text. “Hovde’s most serious mistake is misunderstanding (or misrepresenting) what will likely happen to GGP’s unsecured debt. Hovde assumes that it either remains outstanding (throughout its presentation, Hovde […]
Distressed Debt Investing 11/25/09 When investing in distressed debt, one has to be aware that negotiations can affect a creditor’s ultimate recovery – for the good or the bad. Why does this dynamic occur? More appropriately, what influences a creditor’s decision to negotiate in a bankruptcy proceeding? As noted quite often in this blog, the […]
Distressed Debt Investing Website: 10/26/09 The exclusivity period is the period after the bankruptcy petition date in which only the debtor can file its Chapter 11 plan. This is advantageous in that the company can work out its own version of how it sees fit in financing itself going forward – without creditors pressing for […]