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Foreword | |
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Preface | |
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Acknowledgments | |
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The General Landscape of Distress Investing | |
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The Changed Environment | |
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Trends in Corporate Debt Growth and Leverage before the Financial Meltdown of 2007-2008 | |
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Junk Bonds and the Levering-Up Period | |
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The Syndicated Loan Market and Leveraged Loans | |
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Financial Meltdown of 2007-2008 | |
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Principal Provisions of the 2005 Bankruptcy Act as They Affect Chapter 11 Reorganizations of Businesses | |
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The Theoretical Underpinning | |
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What Market? | |
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Toward a General Theory of Market Efficiency | |
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External Forces Influencing Markets Explained | |
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What Risk? | |
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Capital Structure and Credit Risk | |
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Valuation | |
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The Company as a Stand-Alone Entity | |
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Control and Its Vital Importance | |
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The Causes of Financial Distress | |
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Lack of Access to Capital Markets | |
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Deterioration of Operating Performance | |
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Deterioration of GAAP Performance | |
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Large Off-Balance-Sheet Contingent Liabilities | |
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Deal Expenses and Who Bears Them | |
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Attorneys and Financial Advisers' Compensation Structure and the Distribution of the Fee Pie | |
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Time in Chapter 11 and Number of Legal Firms Retained | |
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Determinants of Legal Fees and Expenses | |
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Determinants of Financial Advisers' Fees and Expenses | |
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Can Professional Costs Be Excessive? | |
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Appendix | |
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Other Important Issues | |
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Management Compensation and Entrenchment | |
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Tax and Political Disadvantages | |
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The Five Basic Truths of Distress Investing | |
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No One Can Take Away a Corporate Creditor's Right to a Money Payment Outside of Chapter 11 or Chapter 7 | |
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Chapter 11 Rules Influence All Reorganizations | |
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Substantive Characteristics of Securities | |
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Restructurings Are Costly for Creditors | |
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Creditors Have Only Contractual Rights | |
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Restructuring Troubled Issuers | |
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Voluntary Exchanges | |
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Problems with Voluntary Exchanges | |
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The Holdout Problem Illustrated | |
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Making a Voluntary Exchange Work | |
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Tax Disadvantages of a Voluntary Exchange versus Chapter 11 Reorganization | |
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A Brief Review of Chapter 11 | |
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Liquidations and Reorganizations | |
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Starting a Case: Voluntary versus Involuntary Petitions | |
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Forum Shopping | |
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Parties in a Chapter 11 Case | |
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Administration of a Chapter 11 Case | |
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The Chapter 11 Plan | |
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The Workout Process | |
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Parties and Their Differing Needs and Desires | |
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Types of Chapter 11 Cases | |
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Leverage Factors in Chapter 11 | |
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The Investment Process | |
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How to Analyze: Valuation | |
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Strict Going Concern Valuation | |
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Resource Conversion Valuation | |
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Liquidation Valuations | |
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Due Diligence for Distressed Issues | |
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Distress Investing Risks | |
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Risks Associated with the Alteration of Priorities | |
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Risks Associated with Collateral or Enterprise Valuation | |
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Reorganization Risks | |
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Other Risks | |
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Form of Consideration versus Amount of Consideration | |
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Cases and Implications for Public Policy | |
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Brief Case Studies of Distressed Securities, 2008-2009 | |
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Performing Loans Likely to Remain Performing Loans | |
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Small Cases | |
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Large Cases | |
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Capital Infusions into Troubled Companies | |
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A Small Case: Home Products International | |
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The Early Years | |
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Growth by Acquisitions | |
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Retail Industry Woes | |
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The Fight for Control | |
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Amendment of Indenture and Event of Default | |
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The Decision: Prepackaged Chapter 11 | |
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Treatment of Impaired Classes under the Plan | |
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Financial Means for Implementation of the Plan | |
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Going-Concern and Liquidation Valuations | |
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A Large Reorganization Case: Kmart Corporation | |
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Landlords and Unexpired Leases | |
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Vendors and Critical Vendor Motions | |
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Management and KERPs Pre-2005 BAPCPA | |
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Fraudulent Transfers | |
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Subsidiary Guarantees and Substantive Consolidation | |
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Chapter 11 Committees and Out-of-Control Professional Costs | |
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Blocking Positions | |
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Buying Claims in Chapter 11 | |
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Debtor-in-Possession Financing | |
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Kmart's Plan of Reorganization and Plan Investors | |
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Investment Performance | |
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An Ideal Restructuring System | |
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Feasibility and Cash Bailouts | |
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Good Enough Rather Than Ideal | |
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Highly Beneficial Elements in the U.S. Restructuring System | |
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Goals of an Ideal Restructuring System | |
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Suggested Reforms | |
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Notes | |
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About the Authors | |
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Index | |