Topic Archives: Distressed Securities

This categories includes interesting developments from the high yield/distressed world. Some of these are original research while others are a summary of other analyst opinions on interesting distressed cases. So far, there aren’t many entries here and remains a work in progress.

The Anatomy of Double Dip Bankruptcy Claim

This post was taken from Distressed Debt Investing. The Anatomy of a Double-Dip Mark P. Kronfeld (1) American Bankruptcy Institute Bankruptcy lawyers and distressed investors often loosely use the term “double-dip” to describe scenarios where a creditor can increase its recovery by multiplying its allowed claim against a particular entity or asserting claims against multiple […]

The Postpetition Interest Debate

Distressed Debt Investing Website:   The Postpetition Interest Debate: What Distressed Debt Investors Need to Know Bankruptcy Courts have long taken divergent approaches to the appropriate calculation of postpetition interest on general unsecured claims in solvent debtor cases.  While some courts have applied the federal judgment rate of interest pursuant to 28 U.S.C. § 1961(a), […]

Contesting Priming Liens in DIP Financing

Distressed Investing Website: Contesting Priming Liens in DIP Financing Within any chapter 11 business bankruptcy, a secured creditor runs the risk of having its interest primed in favor of a lender who provides the debtor additional operating capital during the pendency of the bankruptcy proceedings through debtor-in-possession (“DIP”) financing under § 364 of the Bankruptcy […]

Capital Structure Arbitrage

Distressed Debt Investing Capital structure arbitrage is a strategy used by many directional, quantitative, and market neutral credit hedge funds.  In essence, it is going long one security in a company’s capital structure while at the same time going short another security in that same company’s capital structure.  For instance, “long sub bonds, short senior […]

Dynegy bankruptcy filing – history

In the case of Dynegy, the lack of restrictive covenants led to the company changing its corporate structure to take assets away from the unsecured bondholders of DHI. DYN   On November 7, 2011, Dynegy reached a restructuring support agreement (RSA) with a group of bondholders that combined hold $1.4B of DHI’s total $3.4B of […]

AMR files for bankruptcy

11/29/11 AMR filed for bankruptcy protection on 11/29/11 in a surprise move because the company still had $4B in cash. During the company’s third quarter earnings call in mid-October, then Chairman and CEO Gerald Arpey made it clear that bankruptcy was not their preference or goal. Over the Thanksgiving weekend, AMR’s board decided that chapter […]

AMR EETC recovery

This post was taken from Distressed Investing’s website. AMR: EETC Recovery 11/29/11 This morning, AMR Corporation (“AMR”), and its subsidiary American Airlines, Inc. filed for bankruptcy protection in the Southern District of New York. To say that this was a surprise to the market would be a bit of an understatement.   To give you a […]

Fraudulent Conveyance in Dynegy

From xtract research 9/20/11 There are two types of fraudulent transfers under the Delaware Fraudulent Transfer Act. The first, actual fraud, requires actual intent to hinder, delay or defraud any creditor. Actual intent is very difficult to prove, and we don’t believe, it can be successfully argued here. The second, constructive fraud, requires the holders […]

Trade Claims Primer

Distressed Debt Investing Trade Claims Primer Introduction While bank lenders and bondholders generally represent the largest portion of debtor’s pre- petition claims, upon filing there is a large constituency of other creditors who also possess claims against the debtor at various levels of priority within the capital structure. Because the sale, assignment and transfer of […]

Blackstone tries to steal Dynegy

HEARD ON THE STREET AUGUST 16, 2010, 4:45 P.M. ET Blackstone Might Rewire Dynegy’s Balance Sheet By LIAM DENNING It isn’t often a 62% premium offers reason for grumbling. Blackstone Group‘s takeover offer for Dynegy effectively gives it two-thirds of the company’s generation capacity plus cash for no money down. That is because NRG Energy […]