Investing in Distressed Businesses

Using Your Personal Experience and Expertise to Formulate an Investment Thesis It’s time to take an in-depth look at distressed debt investing and how you can use your personal experience together with company valuation methods to make decisions. Most investors will want to enter the distressed investing space by relying on the expertise of various funds that focus on these types of investments. Thus, I’ll address the constraints an individual investor faces and how one determined to make their picks can gain an advantage over others in the markets. You […]

Assessing Legal Risk    “One man’s rubbish is another man’s treasure.” -William & Robert Chambers Journal of Popular Literature, Science and Arts (1879)  “A little learning is a dangerous thing” -Alexander Pope, An Essay on Criticism (1709)    Purchasing operating assets from a financially distressed seller is a fantastic opportunity to buy low. Before doing so, however, any buyer must take into account a host of considerations, including, but not limited to, operational, competitive, integration, and legal issues, such as fraudulent transfers and successor liability. Buying a business, or business […]

Learn how to read a balance sheet, or more importantly, how to read between the lines of the balance sheet assets, liabilities, and equity.

Investors may seek to purchase bankruptcy claims against a debtor as part of an investment strategy. What do they need to know before they invest?

Don’t expect to challenge a 363 sale so easily. Find out why you should pursue other options for purchasing assets from a distressed seller.

A stalking horse bidder makes the first bid in an bankruptcy auction, setting the initial price and structure of the sale– but there are some disadvantages.

Why would a secured creditor prefer to sell its collateral outside of bankruptcy? Here’s how time, money, and control differ in a 363 sale vs Article 9 sale.

Ordinary asset purchase? Article 9 sale? Bankruptcy acquisition? When buying a distressed business, the type of purchase should be top of mind.

Why Sell a Bankruptcy Claim? Imagine this: One of your customers sends you a notice stating it has filed for chapter 7 or chapter 11 bankruptcy protection rather than the payment for goods or services provided that you were expecting. In technical terms, you now have a “claim” against the “debtor,” but you aren’t sure you want to deal with the bankruptcy process and delay only to recover part of what you are owed. When a bankruptcy claims purchaser offers to purchase your bankruptcy claim from you for cash, you […]

New to the bankruptcy claims trading marketplace? Take a close look at documenting the purchase and sale of a bankruptcy claim.