Investing in Financially Distressed Firms: A Guide to Pre- and Post-Bankruptcy Opportunities

(Hardback)

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A study of the impact of the 1978 Bankruptcy Reform Act on firms that file under chapter 11 and on investors who own shares or bonds in financially distressed corporations. The authors explain how to spot potential investment targets, assess risk, and profit from investing in such firms. The legal issues involved in investing in bankrupt firms, the environment within which the bankrupt firm operates and the relationship between stock market efficiency and bankrupt firms also receive thorough coverage. The authors also describe the reasons for corporate financial failure, the effects of reorganization on a firm, the differences between old and new bankruptcy laws and the legal settlement of bankruptcy claims.

Reviews

This book examines the impact of the 1978 Bankruptcy Reform Act on firms that file under Chapter 11 and on investors who own stock or bonds in financially distressed corporations. The authors describe an analytical model for picking out potential investment targets and assessing risk in firms undergoing bankruptcy reorganization. They also deal with the legal issues involved and describe the environment within which a bankrupt firm operates. Four case studies illustrate the process of bankruptcy and the possible investment outcomes.-AAII Journal
"This book examines the impact of the 1978 Bankruptcy Reform Act on firms that file under Chapter 11 and on investors who own stock or bonds in financially distressed corporations. The authors describe an analytical model for picking out potential investment targets and assessing risk in firms undergoing bankruptcy reorganization. They also deal with the legal issues involved and describe the environment within which a bankrupt firm operates. Four case studies illustrate the process of bankruptcy and the possible investment outcomes."-AAII Journal

Author Bio

MURALI RAMASWAMI is Senior Vice President and Director of Product Development at the Travelers Investment Management Company. He has published extensively in the areas of microeconomics of industrial organization, corporate bankruptcy, futures and options, and global finance and is a frequent speaker at industry and academic seminars. SUSAN E. MOELLER is an Assistant Professor of Finance at the University of Michigan in Flint. She has published extensively in the areas of corporate bankruptcy and international finance.