Distressed investing means buying the securities or assets of companies in or near financial distress, usually debt trading below ~70–80 cents on the dollar or yielding more than ~1,000bp over Treasuries, in order to profit from recovery, restructuring, or control. Special situations is the wider bucket of complex, event-driven, capital-structure-sensitive investments: rescue financings, DIP loans, liability-management transactions, orphaned assets, litigation-driven claims, and structured equity for stressed companies. These strategies are counter-cyclical, legally intensive, and, in the hands of experts, among the most consistently profitable in private markets.
What the study covers
- 1Overview
- 2How it works
- 3Economics and key numbers
- 4Key players and landmark situations
- 5Risks and pitfalls
- 6How an expert thinks about it
- 7Glossary
- 8Related sections
Technical exhibits
Worked examples, checklists and case studies included with this study.
Loan to Own Fulcrum Worked Example
A full recovery waterfall, fulcrum-security identification, rights-offering and backstop economics, and returns
Chapter 11 Process Primer
US Chapter 11 from filing to emergence: key code sections, timelines, voting math, cramdown, and recent case law