Toxic Debt and Financially Distressed Companies

by a searcher

3 years ago

Curious based on your networks, do you come across financially distressed companies ($5M+ annual revenue) that have their debt exceed the value of the company and need that toxic debt fixed before becoming insolvent? Traditionally, I had steered clear and never considered these opportunities but am now thinking through solving that challenge for those in that space.

Any thoughts or leads would be appreciated.

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8 comments

investor from Hobart and William Smith Colleges

Dan, how is this done without inviting claims of fraudulent transfer? "...Through the use of a special situation fund that acquires the debts of businesses that are crippled by it and then divorces the debt from the business". Divorcing the debt from the assets is clearly the brilliant move and for very good reasons there is about 7,000 years of case law forbidding it.

3 years ago | like reply | 0 likes

searcher from Columbia University - Columbia Business School

Very familiar with the space and have done a lot in the form of distressed buy-outs. If anyone comes across any opportunities in the space (excluding O&G) please feel free to reach out.

3 years ago | like reply | 2 likes

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