{"product_id":"distress-investing-isbn-9780470117675","title":"Distress Investing","description":"\u003cp\u003eFinancial innovation, new laws and regulations, and the financial meltdown of 2007–2008 are just a few of the forces that have shaped, and continue to shape, today's distress investment environment. Combine this with the fact that the discipline of distress investing doesn't always follow what conventional wisdom says, and you can see why it is one of the most challenging areas in finance. \u003c\/p\u003e\u003cp\u003eNobody understands this better than Martin Whitman—the legendary founder of Third Avenue Management LLC and a pioneer in the field of distressed markets—and leading academic Dr. Fernando Diz of Syracuse University. That's why they decided to write \u003ci\u003eDistress Investing\u003c\/i\u003e. As an outgrowth of annual distress and value investing seminars the two have taught together at Syracuse University's Martin J. Whitman School of Management, this reliable resource will help you gain a better understanding of the essential principles and techniques associated with distress investing and show you how to effectively apply them in the real world. \u003c\/p\u003e\u003cp\u003eDivided into four comprehensive parts—the General Landscape of Distress Investing, Restructuring Troubled Issuers, the Investment Process, and Cases and Implications for Public Policy—this book comprehensively covers the practice of buy-and-hold investing in distressed credits, whether it be performing loans or the reinstated issues of a reorganized issuer. \u003c\/p\u003e\u003cp\u003eFrom the recent changes to U.S. bankruptcy code and creditor rights to cash bailouts, you'll quickly learn how to analyze distressed situations such as pricing issues, arbitrage opportunities, tax disadvantages, and the reorganization of funding plans. Along the way, case studies of both large and small distress investing deals—from Kmart to Home Products International—will give you a better perspective of the business. \u003c\/p\u003e\u003cp\u003e\u003cb\u003eCritical topics addressed throughout these pages include:\u003c\/b\u003e \u003c\/p\u003e\u003cul\u003e \u003cli\u003eChapter 11 bankruptcy and why it's not considered an ending, but rather a beginning when it comes to distress investing\u003c\/li\u003e \u003cli\u003eThe \"Five Basic Truths\" of distress investing\u003c\/li\u003e \u003cli\u003eThe difficulty of due diligence for distressed issues\u003c\/li\u003e \u003cli\u003eDistress investing risks—from reorganization risk to risk associated with the alteration of priority of payments in bankruptcy\u003c\/li\u003e \u003cli\u003eValuing companies by both going concern as well as their resource conversion attributes\u003c\/li\u003e \u003c\/ul\u003e \u003cp\u003eIn today's turbulent economic environment, distress investing presents some enticing opportunities. Put yourself in a better position to excel at this endeavor with \u003ci\u003eDistress Investing\u003c\/i\u003e as your guide. \u003c\/p\u003e\u003cp\u003eForeword xiii\u003c\/p\u003e \u003cp\u003ePreface xv\u003c\/p\u003e \u003cp\u003eAcknowledgments xxii\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart One The General Landscape Of Distress Investing\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 1 The Changed Environment 3\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eTrends in Corporate Debt Growth and Leverage before the Financial Meltdown of 2007–2008 4\u003c\/p\u003e \u003cp\u003eJunk Bonds and the Levering-Up Period 6\u003c\/p\u003e \u003cp\u003eThe Syndicated Loan Market and Leveraged Loans 12\u003c\/p\u003e \u003cp\u003eFinancial Meltdown of 2007–2008 16\u003c\/p\u003e \u003cp\u003ePrincipal Provisions of the 2005 Bankruptcy Act as They Affect Chapter 11 Reorganizations of Businesses 22\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 2 The Theoretical Underpinning 27\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eWhat Market? 27\u003c\/p\u003e \u003cp\u003eToward a General Theory of Market Efficiency 29\u003c\/p\u003e \u003cp\u003eExternal Forces Influencing Markets Explained 32\u003c\/p\u003e \u003cp\u003eWhat Risk? 34\u003c\/p\u003e \u003cp\u003eCapital Structure and Credit Risk 38\u003c\/p\u003e \u003cp\u003eValuation 39\u003c\/p\u003e \u003cp\u003eThe Company as a Stand-Alone Entity 41\u003c\/p\u003e \u003cp\u003eControl and Its Vital Importance 42\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 3 The Causes of Financial Distress 43\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eLack of Access to Capital Markets 44\u003c\/p\u003e \u003cp\u003eDeterioration of Operating Performance 46\u003c\/p\u003e \u003cp\u003eDeterioration of GAAP Performance 48\u003c\/p\u003e \u003cp\u003eLarge Off-Balance-Sheet Contingent Liabilities 51\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 4 Deal Expenses and Who Bears Them 53\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eAttorneys and Financial Advisers’ Compensation Structure and the Distribution of the Fee Pie 54\u003c\/p\u003e \u003cp\u003eTime in Chapter 11 and Number of Legal Firms Retained 66\u003c\/p\u003e \u003cp\u003eDeterminants of Legal Fees and Expenses 67\u003c\/p\u003e \u003cp\u003eDeterminants of Financial Advisers’ Fees and Expenses 68\u003c\/p\u003e \u003cp\u003eCan Professional Costs Be Excessive? 68\u003c\/p\u003e \u003cp\u003eAppendix 69\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 5 Other Important Issues 71\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eManagement Compensation and Entrenchment 71\u003c\/p\u003e \u003cp\u003eTax and Political Disadvantages 73\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 6 The Five Basic Truths of Distress Investing 77\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eTruth 1: No One Can Take Away a Corporate Creditor’s Right to a Money Payment Outside of Chapter 11 or Chapter 7 78\u003c\/p\u003e \u003cp\u003eTruth 2: Chapter 11 Rules Influence All Reorganizations 82\u003c\/p\u003e \u003cp\u003eTruth 3: Substantive Characteristics of Securities 84\u003c\/p\u003e \u003cp\u003eTruth 4: Restructurings Are Costly for Creditors 86\u003c\/p\u003e \u003cp\u003eTruth 5: Creditors Have Only Contractual Rights 87\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart Two Restructuring Troubled Issuers\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 7 Voluntary Exchanges 91\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eProblems with Voluntary Exchanges 92\u003c\/p\u003e \u003cp\u003eThe Holdout Problem Illustrated 93\u003c\/p\u003e \u003cp\u003eMaking a Voluntary Exchange Work 94\u003c\/p\u003e \u003cp\u003eTax Disadvantages of a Voluntary Exchange versus Chapter 11 Reorganization 95\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 8 A Brief Review of Chapter 11 99\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eLiquidations and Reorganizations 100\u003c\/p\u003e \u003cp\u003eStarting a Case: Voluntary versus Involuntary Petitions 100\u003c\/p\u003e \u003cp\u003eForum Shopping 101\u003c\/p\u003e \u003cp\u003eParties in a Chapter 11 Case 101\u003c\/p\u003e \u003cp\u003eAdministration of a Chapter 11 Case 103\u003c\/p\u003e \u003cp\u003eThe Chapter 11 Plan 109\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 9 The Workout Process 117\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eParties and Their Differing Needs and Desires 117\u003c\/p\u003e \u003cp\u003eTypes of Chapter 11 Cases 120\u003c\/p\u003e \u003cp\u003eLeverage Factors in Chapter 11 125\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart Three The Investment Process\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 10 How to Analyze: Valuation 133\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eStrict Going Concern Valuation 134\u003c\/p\u003e \u003cp\u003eResource Conversion Valuation 146\u003c\/p\u003e \u003cp\u003eLiquidation Valuations 148\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 11 Due Diligence for Distressed Issues 151\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 12 Distress Investing Risks 157\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eRisks Associated with the Alteration of Priorities 158\u003c\/p\u003e \u003cp\u003eRisks Associated with Collateral or Enterprise Valuation 165\u003c\/p\u003e \u003cp\u003eReorganization Risks 168\u003c\/p\u003e \u003cp\u003eOther Risks 168\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 13 Form of Consideration Versus Amount Of Consideration 171\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart Four Cases and Implications for Public Policy\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 14 Brief Case Studies of Distressed Securities, 2008–2009 177\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003ePerforming Loans Likely to Remain Performing Loans 178\u003c\/p\u003e \u003cp\u003eSmall Cases 182\u003c\/p\u003e \u003cp\u003eLarge Cases 184\u003c\/p\u003e \u003cp\u003eCapital Infusions into Troubled Companies 184\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 15 A Small Case : Home Products International 187\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Early Years 188\u003c\/p\u003e \u003cp\u003eGrowth by Acquisitions 189\u003c\/p\u003e \u003cp\u003eRetail Industry Woes 192\u003c\/p\u003e \u003cp\u003eThe Fight for Control 195\u003c\/p\u003e \u003cp\u003eAmendment of Indenture and Event of Default 196\u003c\/p\u003e \u003cp\u003eThe Decision: Prepackaged Chapter 11 197\u003c\/p\u003e \u003cp\u003eTreatment of Impaired Classes under the Plan 198\u003c\/p\u003e \u003cp\u003eFinancial Means for Implementation of the Plan 199\u003c\/p\u003e \u003cp\u003eGoing-Concern and Liquidation Valuations 199\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 16 A Large Reorganization Case: Kmart Corporation 203\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eLandlords and Unexpired Leases 204\u003c\/p\u003e \u003cp\u003eVendors and Critical Vendor Motions 206\u003c\/p\u003e \u003cp\u003eManagement and KERPs Pre-2005 BAPCPA 208\u003c\/p\u003e \u003cp\u003eFraudulent Transfers 209\u003c\/p\u003e \u003cp\u003eSubsidiary Guarantees and Substantive Consolidation 210\u003c\/p\u003e \u003cp\u003eChapter 11 Committees and Out-of-Control Professional Costs 211\u003c\/p\u003e \u003cp\u003eBlocking Positions 211\u003c\/p\u003e \u003cp\u003eBuying Claims in Chapter 11 214\u003c\/p\u003e \u003cp\u003eDebtor-in-Possession Financing 215\u003c\/p\u003e \u003cp\u003eKmart’s Plan of Reorganization and Plan Investors 218\u003c\/p\u003e \u003cp\u003eInvestment Performance 222\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 17 An Ideal Restructuring System 225\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eFeasibility and Cash Bailouts 226\u003c\/p\u003e \u003cp\u003eGood Enough Rather Than Ideal 226\u003c\/p\u003e \u003cp\u003eHighly Beneficial Elements in the U.S. Restructuring System 226\u003c\/p\u003e \u003cp\u003eGoals of an Ideal Restructuring System 228\u003c\/p\u003e \u003cp\u003eSuggested Reforms 229\u003c\/p\u003e \u003cp\u003eNotes 233\u003c\/p\u003e \u003cp\u003eAbout the Authors 238\u003c\/p\u003e \u003cp\u003eIndex 239 \u003c\/p\u003e “…this is the best book that I have read since \u003ci\u003eThe Black Swan\u003c\/i\u003e…do yourself a favor and pick up a copy; you'd be crazy not to.” (\u003ci\u003eSeekingAlpha.com\u003c\/i\u003e, June 11, 2009)  \u003cp\u003e\u003cb\u003eMARTIN J. WHITMAN\u003c\/b\u003e is Chairman and co-CIO of Third Avenue Management LLC. He has taught courses in value investing and distressed investing for the past thirty years at the Schools of Management at both Syracuse University and Yale University. Whitman is also the author of the Wiley titles \u003ci\u003eValue Investing\u003c\/i\u003e and \u003ci\u003eThe Aggressive Conservative Investor.\u003c\/i\u003e  \u003c\/p\u003e\u003cp\u003e\u003cb\u003eFERNANDO DIZ\u003c\/b\u003e is the Martin J. Whitman Associate Professor of Finance and Director of the Ballentine Investment Institute at Syracuse University. His research specialties are in the areas of trading, derivative securities, and value and distress investing. Diz has written for the \u003ci\u003eJournal of Futures Markets,\u003c\/i\u003e the\u003ci\u003e Review of Financial Studies,\u003c\/i\u003e and the \u003ci\u003eJournal of Alternative Investments\u003c\/i\u003e.   \u003c\/p\u003e\u003cp\u003eFinancial innovation, new laws and regulations, and the financial meltdown of 2007–2008 are just a few of the forces that have shaped, and continue to shape, today's distress investment environment. Combine this with the fact that the discipline of distress investing doesn't always follow what conventional wisdom says, and you can see why it is one of the most challenging areas in finance. \u003c\/p\u003e\u003cp\u003eNobody understands this better than Martin Whitman—the legendary founder of Third Avenue Management LLC and a pioneer in the field of distressed markets—and leading academic Dr. Fernando Diz of Syracuse University. That's why they decided to write \u003ci\u003eDistress Investing\u003c\/i\u003e. As an outgrowth of annual distress and value investing seminars the two have taught together at Syracuse University's Martin J. Whitman School of Management, this reliable resource will help you gain a better understanding of the essential principles and techniques associated with distress investing and show you how to effectively apply them in the real world. \u003c\/p\u003e\u003cp\u003eDivided into four comprehensive parts—the General Landscape of Distress Investing, Restructuring Troubled Issuers, the Investment Process, and Cases and Implications for Public Policy—this book comprehensively covers the practice of buy-and-hold investing in distressed credits, whether it be performing loans or the reinstated issues of a reorganized issuer. \u003c\/p\u003e\u003cp\u003eFrom the recent changes to U.S. bankruptcy code and creditor rights to cash bailouts, you'll quickly learn how to analyze distressed situations such as pricing issues, arbitrage opportunities, tax disadvantages, and the reorganization of funding plans. Along the way, case studies of both large and small distress investing deals—from Kmart to Home Products International—will give you a better perspective of the business. \u003c\/p\u003e\u003cp\u003e\u003cb\u003eCritical topics addressed throughout these pages include:\u003c\/b\u003e \u003c\/p\u003e\u003cul\u003e \u003cli\u003eChapter 11 bankruptcy and why it's not considered an ending, but rather a beginning when it comes to distress investing\u003c\/li\u003e \u003cli\u003eThe \"Five Basic Truths\" of distress investing\u003c\/li\u003e \u003cli\u003eThe difficulty of due diligence for distressed issues\u003c\/li\u003e \u003cli\u003eDistress investing risks—from reorganization risk to risk associated with the alteration of priority of payments in bankruptcy\u003c\/li\u003e \u003cli\u003eValuing companies by both going concern as well as their resource conversion attributes\u003c\/li\u003e \u003c\/ul\u003e \u003cp\u003eIn today's turbulent economic environment, distress investing presents some enticing opportunities. Put yourself in a better position to excel at this endeavor with \u003ci\u003eDistress Investing\u003c\/i\u003e as your guide.\u003c\/p\u003e","brand":"Wiley","offers":[{"title":"Default Title","offer_id":47989077344485,"sku":"NP9780470117675","price":73.0,"currency_code":"USD","in_stock":false}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/1842\/7735\/files\/9780470117675.jpg?v=1761782701","url":"https:\/\/k12savings.com\/es\/products\/distress-investing-isbn-9780470117675","provider":"K12savings","version":"1.0","type":"link"}