Distress Investing

Whitman ran Third Avenue and he bought things that were falling apart. This is him explaining how the machinery of a restructuring actually works rather than how it looks from outside.

Here is the part that reframed it for me. In a distressed situation you are not buying a company, you are buying a position in a line, and the line decides everything. Where your claim sits. What it is secured by. Who is in front of you and what they want. Whether the thing gets reorganized or liquidated.

Two people can buy paper in the same company on the same day and one of them ends up owning the business and the other one ends up with nothing.

It is dense and parts of it read like a textbook, which is partly what it is, since Diz teaches. I have never finished it and I do not think you need to.

I have also never bought distressed debt, so take the recommendation for what it is. What I use it for is the other side of the table. Every time I structure something now I am thinking about what my position looks like if this goes badly, not just what it pays if it goes well.