RT Journal Article
SR Electronic
T1 “Alternative“ Investment Managers and Bankruptcy
JF The Journal of Private Equity
FD Institutional Investor Journals
SP 47
OP 51
DO 10.3905/jpe.2007.682338
VO 10
IS 2
A1 Stephen M. Brecher
A1 Stephanie Breslow
A1 Adam C. Harris
A1 James Horgan
A1 Deirdre A. Martini
YR 2007
UL https://pm-research.com/content/10/2/47.abstract
AB A growing number of private equity funds and hedge funds are using bankruptcy proceedings as a way to acquire control of companies for significantly less than they would have to pay in an auction or hostile takeover. Activist investors are purchasing claims against companies veering toward bankruptcy and using them to gain influence in the creditor committees that shape a bankrupt company's reorganization as well as to benefit if debt is converted to equity. The impact these new patterns of bankruptcy are having on the U.S. economy is not yet clear, but those who find themselves becoming involved in these new bankruptcy proceedings must be prepared to play by a new and ever-changing set of rules.TOPICS: Private equity, financial crises and financial market history, portfolio construction, analysis of individual factors/risk premia