In the world of restructuring and distressed debt, there are truly only a handful of books that matter. Luckily for those interested in these fields they are incredibly well-written and worth the time for anyone to go through.
Unfortunately, restructuring and distressed debt aren't exactly popular areas of finance, so you may have a bit of trouble finding these books since a few of them are out of print. Usually Amazon will at least have a few used copies hanging around, however.
This is the Bible in the world of restructuring and distressed debt. Moyer walks you through how distressed hedge funds think about dealing with truly distressed companies that are almost certainly going to go Chapter 11 (he spends less time on out-of-court restructurings, which is partly a function of what the restructuring landscape looked like in the early 2000s when he wrote the book).
Moyer also focuses very much on traditional distressed debt hedge fund tactics - revolving around taking appropriate, often controlling, positions in the capital structure prior to a Chapter 11 - as opposed to doing distressed lending or out-of-court exchanges with distressed companies.
PE funds that have huge credit arms - like Apollo, TPG, Blackstone, and KKR - all operate in a fundamentally different way. All will actively look to place favorable new capital in distressed companies in the form of term loans or secured notes, instead of looking toward traditional "buy for control" strategies.
This is partly because if you imagine a distressed company, there are obviously onerous liabilities that the purchaser does not want to assume. However, if they don't assume those liabilities (e.g. do an asset sale) then that leaves behind a rather decrepit, toxic shell. This is why asset sales normally go through an in-court process where there are more protective elements and one can try to leave a shell with some remaining assets (such as NOLs, with Washington Mutual being an interesting quasi-example of this tactic).
When in restructuring investment banking or working at a distressed fund, you're looking at capital structures all day. What sets MDs and partners apart from analysts and associates is that the former have the contextual understanding to figure out why term loans are trading at 84 while senior notes are trading at 73 and if that is an appropriate spread (see the other post on the characteristics of a distressed company).
I wouldn't recommend reading Guthner cover-to-cover and taking meticulous notes. That may be more appropriate for when you have a garden leave period between jobs. However, breezing through the book looking for key words for restructuring and distressed debt like "term loans", "covenants", and "notes" is worth doing.
Many of those who are not practitioners far overstate just how academic all of finance is. Practically speaking, much of the academic literature around finance - regardless of if it's referring to M&A, distressed debt, or bond trading - is far too theoretical.
The Vulture Investors tells a series of stories from the 80s about distressed debt investors and how they maneuvered to get absolute windfalls. It's a fun, in-depth read that will help you contextualize RX deals.
It's an old book and it won't necessarily teach you the way that Whitman or Moyer do. However, it is the singular best book out of all of those listed here on the psychological aspect of distressed debt investing.
These are as much questions of psychology as they are questions of finance or law. The Vulture Investors helps you understand these through a series of incredibly fun stories (well, fun if you're interested in distressed debt and special situations).
Providing theoretical and practical insight, Distressed Debt Analysis: Strategies for Speculative Investors presents a conceptual, but not overly technical, outline of the financial and bankruptcy law context in which restructurings take place. The book covers the broader financial environment of the reorganization and the basic process of investment analysis and investment strategies. The author uses numerous real-world examples and case studies to emphasize important concepts and critical issues. The developments that have created these extraordinary investment opportunities have also created tremendous demand for professionals with experience and knowledge in the restructuring process. Distressed Debt Analysis: Strategies for Speculative Investors addresses the complete knowledge needs of investors and professionals in the burgeoning world of financially distressed companies. It is perfect for financial analysts, portfolio managers, bankruptcy departments of law firms, restructuring advisory groups, turnaround consulting firms, and reorganization and distressed securities departments of investment banks.
Large-sized firms tend to be more capable of absorbing the impacts of economic, social, and political change and they are more likely to become profitable due to having more resources and experience as compared to small firms. Therefore, the risk of being financially distressed reduces as firm size increases [68,69,78].
Economic liberty and personal freedom ARE quite linked. When you are forced to endure a monetary system based on debt, the result is that you only have equitable interest in your stuff. That's because you haven't paid for it substance-for-substance. With the Constitution always functioning on the equity side and not the common law side the result is that contracts govern everything we do. And it isn't even necessary, under the U.C.C., to be aware that you ARE under contract to perform. This is a subject matter that is not easy for the uninitiated to grasp but everyone needs to study it. Because it is in fact very real and it does control our personal freedom whether most realize it or not.
I was actually distressed to see the way in which Rep. Kucinich's interview was handled. While I will admit that Dr. Paul presented himself in a far superior way, Mr. Kucinich was given short shrift. It seemed to me that significantly more time was accorded to Dr. Paul and I'm sure that a review of the show will bear out this point. Mr. Kucinich seemed to be repeatedly interrupted by Mr. Moyers and Moyers' attitude was noticeably more hostile and bordered on annoying.
Thanks for an excellent interview with Ron Paul. As the American economy sinks deeper into debt and the dollar speeds towards hyperinflation, I predict we will be seeing a lot of Ron Paul on TV in 2008.His knowledge of Austrian economics, sound money and monetary policy will make him the media's darling. The other presidential candidates don't have a clue to these things, so will be left in the dust. Ron Paul is the ONLY presidential candidate who can define the problem and make it comprehensible to the masses, and best of all, prescribe the correct solution. America needs a doctor, not a lawyer.
**Corporate power-- I believe Dr. Paul is correct in asserting that we are heading towards a corporate dominated "quiet dictatorship". Its already starting to happen. Read the piece by John Hockenberry in the current issue of Technology Review. News rooms are already starting to edit themselves to portray larger events in a light that makes the megacorps look good. Corporations derive their power from the government -- to give them unlimited spectrum, to forgive them for their debts, to take care of their little environmental crises. Without a strong central government megacorps would be neutered and toothless.
great show!!! thanks to pbs/bill moyers!!!! as far as "mainstream media", they do no service to the people of america in that they do exert a measure of control over the "who, what, where" etc that we come to know. to deny a voice in debates to dennis kucinich & ron paul & anyone else who chooses to participate is, indeed, an egregious affront to the very "democracy" we are trying to spread across the world like p-nut butter on fresh bread!!! really, we can't seem to make it work ourselves....who do we think we are?? the media can make/break a candidacy...just ask howard dean!!! wouldn't he have been a much better, safer president that the person chosen by the supreme court??? wasn't "the scream" just a normal reaction of a man who had just proven the american aspiration that any person can, indeed, run for pres.??? why, then, was it blown out of all proportion, and a viable candidacy ruined??? probably for the same reason as denying kucinich & paul the right to debate!!!! the very thought of losing power, money etc scares the media into using horrid tactics. why, then, do we allow it?? thanks, again, for giving these 2 fellows a forum to introduce them to we voters who deserve no less.
The founders gave their blood to win our republic and questioned whether future generations could keep it. It only took 130 years for our country to then loose control of our money supply to the private international bankers, as Rothchilds predicted. The two party system is now a charade and our citizens don't see the collusion between Washington and the Fed where we must beg for a crumb to fall once every decade or so while these crooks spent all the social security money, created a fiat ponzi scheme with our dollar, exported our manufacturing and wealth and are now creating the massive inflation that Ron Paul has warned us about... The big yard sale of America is next folks and they'll be buying what's left for 10 cents on the dollar before merging us with Mexico and Canada and giving us the Amero so we can be "competitive" with the Euro and China... unless we wake up and shut the FED down now! Our country is $9 trillion in debt and has $50 Trillion in unfunded entitlements, not including Trillions in toxic fraudulent "sub-prime" debt... and we are told by the MSM that "universal health care" is the BIG issue of this campaign???? Get real America and shut down this fraud...or else we will get NOTHING. Who has the courage to call them out and expose the fraud? Ron Paul. The revolution begins Jan 20th, 2009. Its not Republicans against Democrats; it Americans on Main St. against the global elite running our "Federal Reserve Bank". 2b1af7f3a8