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Investing in Distressed Businesses

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Investing in Bankruptcy Claims as a Cash Investment

Investing in bankruptcy claims can be very profitable or can result in a significant, or even total, loss. Bankruptcy claims are a creditor’s right to payment from a debtor. A bankruptcy claim can be secured by the debtor’s property or can be unsecured. Claims are classified in chapter 11 plans of reorganization according to their […]


90 Second Lesson: How to assess whether a distressed business can be turned around?

QUESTION: Bill H., a business consultant in NYC, asks, how do I determine if a distressed business I am being asked to help is just too far gone to save? ANSWER: Bill, if you have to ask this question, you might be doing your client a service by finding someone else who knows about the […]


Cash is King – The Importance of Liquidity in a Distressed Company’s Capital Structure

A company’s “capital structure” is the array of its liabilities and equity. Capital structure commonly consists of three main components: working capital (or operating debt), financing debt, and equity.


Third-Party Litigation Funding and Issues It Creates In Bankruptcy Cases – This Ain’t Your Father’s Contingency Fee Arrangement!

Third party litigation funding (“TPLF”) is, beyond a doubt, here to stay. In bankruptcy cases, TPLF arises in a number of contexts. First is the TPLF as a pre-petition secured or unsecured creditor—i.e. the TPLF source funded litigation and thereby acquired property rights in litigation proceeds or perhaps otherwise as a result. Second, in a […]


What’s the Difference Anyway? Oil and Gas Business Valuation Differentiated

Even for professionals who are well versed in business valuation theories and approaches, valuations in the oil and gas industry offers challenging issues.  This article provides a quick review of general valuation approaches and highlights some key characteristics and nuances of oil and gas valuations. Valuation Approaches Generally, the most common valuation approaches are: The […]


90 Second Lesson: First Step When Purchasing a Distressed Business

Editors’ Note: this is part of our irregular series in which we answer readers’ questions. If you have a question, submit it to info@dailydac.com and we will try to answer it. QUESTION: What is the first integral decision a potential purchaser of a distressed business must make? ANSWER: Assuming that the seller has not already […]


How to Analyze a Distressed Company (an Introduction) – Salon Media Group

In my last article, I described some of the ways in which individuals can invest in the distressed space. I also described why I think that for the average person it’s generally a much better idea to not try to make individual investments, but rather put money into a fund that has a good track […]


Is Distressed Investing for “the Little Guy”?

Given the focus of this site on distressed debt and equities, I’d like to highlight some points for those considering allocating some of their portfolio to distressed securities. The question I’ll address today is: should self-managed individual investors consider making their own picks in distressed securities? And if so, what is the best way to […]


What is Distressed Investing?

Distressed investing has been a distinct style of investing for a couple of decades now. Many of us probably feel we understand the general gist of it–purchase bonds of a company that are trading at 50 cents on the dollar, or equity shares that are priced below their long-term value, and if you’ve done your […]


Beneath the Surface: Finding Truth in Debtor’s Balance Sheets

Editor’s Note: If you are interested in this topic, we would also like to recommend this Finance and Accounting webinar. A balance sheet provides a snapshot of a company’s financial condition as of a specific date by presenting three components: assets, liabilities, and equity.[i]  While a balance sheet may help its user to evaluate a […]


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