Bankruptcy Claims
Market Description
Bankruptcy claims are monies owed to creditors by companies that typically have filed for Chapter 7 or Chapter 11 bankruptcy. Creditors range from secured and unsecured bond and loan holders, to trade vendors and service providers. Bankrupt companies often have thousands of claimholders- and as a result of protections provided by the court to these corporate debtors, many creditors are left holding overdue accounts receivable that cannot get paid until the completion of the bankruptcy process. Generally speaking, unsecured bonds have a relatively well-established market, as they were originally part of a formal securities offering and were well documented. Unsecured claims, however, until recently had no apparent established marketplace, and represent a large portion of the $1 trillion in bankruptcy claims. Given the unprecedented level of bankruptcy filings that have taken place recently and will continue to occur, bankruptcy claims stands to be one of the largest untapped asset classes out in the marketplace.
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Market News
Feb 4 2010
Movie Gallery files for bankruptcy again — www.ft.com
- Movie Gallery has filed for bankruptcy for the second time since 2007, listing assets of $50 million and liabilities between $500 million and $1 billion
- The company’s chief restructuring officer cited intense competition from online movie rental services and DVD rental kiosks as the main impetus for Movie Gallery’s most recent filing
- Debts of the company include $41 million owed to five top Hollywood studios
Jan 28 2010
Deal done, Spyker faces tough road ahead with Saab — www.reuters.com
- After over a year on the market, Saab has been sold to luxury sports car maker Spyker for $400 million
- Spyker will pay $74 million in cash and $326 million in deferred shares to acquire the Swedish car maker from GM
- While Spyker has saved Saab from imminent demise, the future of the combined companies, neither of which is profitable, is still largely unclear
Jan 27 2010
Filene’s Basement Wins Approval to Pay Creditors 75% — www.businessweek.com
- FB Liquidating Estate won court approval on Tuesday to pay its unsecured creditors roughly 75 cents on the dollar for their claims
- The plan, which makes $57 million available for the payment of unsecured claims, was overwhelmingly approved by the unsecured creditors committee
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