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 […]
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 […]
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 (“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 […]
Editors’ Note: this is part of our irregular series in which we answer readers’ questions. If you have a question, submit it to [email protected] 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 […]