Distressed Investing and Special Situations

Distressed investing begins with an enterprise whose obligations or financing needs cannot be met on ordinary terms. The business may be economically viable but overleveraged, operationally impaired, or both. The investor must distinguish those conditions before estimating value.

An investment can involve discounted debt, rescue capital, an asset purchase, or securities received through a restructuring. Special situations extend beyond insolvency to transactions whose value depends on an event, unusual contractual rights, or a complex ownership structure.