Because it is so difficult to…
Because it is so difficult to appraise managements, we do not believe that outside investors should, as a rule, pay premium prices to invest in the stocks of companies with superior managements. There...
View ArticleFinding the liquidation values of the…
Finding the liquidation values of the assets of a company in distress is a needed step in assessing the likely workout potential of a credit instrument.
View ArticleA prepackaged bankruptcy combines the cost…
A prepackaged bankruptcy combines the cost benefits of an out-of-court exchange offer and the statutory benefits provided by the bankruptcy code.
View ArticleLack of access to capital markets…
Lack of access to capital markets seems likely to be the principal cause of distress in 2008 and 2009.
View ArticleAs long as the value of…
As long as the value of the collateral securing a creditor’s secured claim is more than adequate (oversecured) prepetition, and will not diminish in value postpetition, such a creditor or an investor...
View ArticleWhy would an investor care abut…
Why would an investor care abut understanding the causes of financial distress? If such an understanding helps us better estimate the workout potential for different credit instruments and/or security...
View ArticleCompanies become financially distressed when their…
Companies become financially distressed when their ability to meet either their current or their future financial obligations (an impending interest payment, a principal repayment, a refinancing,...
View ArticleDisasters seem far less likely for…
Disasters seem far less likely for value investors than for others.
View ArticleTime is of the essence; time…
Time is of the essence; time is the enemy of unsecured creditors, and the sooner a reorganization is accomplished, the larger their potential recoveries.
View ArticleOn Wall Street, every speculator is…
On Wall Street, every speculator is called an investor. This is bad semantics.
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