Bankruptcy Claims
Market Description
Bankruptcy claims are monies owed to creditors by companies that typically have filed for Chapter 7 or Chapter 11 bankruptcy. Creditors range from secured and unsecured bond and loan holders, to trade vendors and service providers. Bankrupt companies often have thousands of claimholders- and as a result of protections provided by the court to these corporate debtors, many creditors are left holding overdue accounts receivable that cannot get paid until the completion of the bankruptcy process. Generally speaking, unsecured bonds have a relatively well-established market, as they were originally part of a formal securities offering and were well documented. Unsecured claims, however, until recently had no apparent established marketplace, and represent a large portion of the $1 trillion in bankruptcy claims. Given the unprecedented level of bankruptcy filings that have taken place recently and will continue to occur, bankruptcy claims stands to be one of the largest untapped asset classes out in the marketplace.
Read MoreMarket News
Regent Files Bankruptcy to Give Lenders Radio Company — www.businessweek.com
- Regent Communications, the owner and operator of 62 radio stations in 13 markets, has filed for bankruptcy with about $211 million in debt
- The company plans to eliminate $87 million through a debt for equity conversion that would will give control of the company to its creditors
- Under the current plan Oaktree Capital Management will become the majority owner of Regent once it exits bankruptcy
Mar 10 2010
Six Flags Creditors See Signs Of Merger With Cedar Fair — online.wsj.com
- Speculation of a merger between Cedar Fair and Six Flags have begun to come to light even before Six Flags has left bankruptcy
- Representatives of Avenue Capital, who has committed to raise $450 million in equity for Six Flags, have apparently held talks with the leadership of the rival amusement park operator
- Some bondholders speculate that a merger could greatly improve the recoveries they see from Six Flags bankruptcy case
Mar 9 2010
Extended Stay Seeks to Exit Bankruptcy — online.wsj.com
- Extended Stay filed a plan of reorganization on Friday proposing that its secured lenders join Paulson & Co and Centerbridge Partners to provide exit financing for the hotel chain
- Paulson & Co and Centerbridge will invest a total of $225 million for a 22.5% stake in the company, while the holders of $4.1 billion in mortgage debt will receive new mortgage notes totaling $2.5 billion and a 55% stake
- Extended Stay also plans to raise $225 million through a rights offering
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