Wheeling and dealing

P. ScottScherrer1
1P. Scott Scherrer is a business advisor at Greenbrier Partners, Bedford, UK. Tel: 603‐860‐8784, Fax: 603‐472‐7842, E‐mail: [email protected]

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This article addresses strategies used by creditors to take control of businesses in bankruptcy. The creditors are able to convert their debt to equity ownership by acquiring a significant amount of the companies’ outstanding debt and then controlling the bankruptcy process. The article provides an example of this process. Further, the risks concomitant with the debt acquisition strategy are discussed.

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