A detailed and compelling look at distressed securities investing in today’s market
In the corporate world, “vulture” investors in distressed securities serve the same cleanup function as vultures do in the natural world: they deal with failing companies, digest bad debt, and mop up after bankruptcies. Since this market’s structural and legal complexities create greater inefficiencies than in other investment fields, it’s a style of investing that can make money during both booms and busts. While recent economic carnage has made opportunities for vulture investors, more convoluted bankruptcies, conflicts of interest, and even government intervention have made this arena harder to negotiate.
Nobody understands this better than author George Schultze, founder of Schultze Asset Management. During his successful career as a vulture investor, he’s learned a number of lessons and developed an investment philosophy that has served him well. Now, in The Art of Vulture Investing, Schultze shares his valuable insights and experiences with you. Engaging and informative, this reliable guide offers a bird’s-eye into the opportunities and risks associated with vulture investing. And while it may not always be pretty, you’ll see exactly why this process is necessary for our economic ecosystem.
Throughout this book, Schultze explains the theory and strategy of vulture investing in clear and lively prose, illustrating each concept with examples from his own varied experience that show how the landscape has changed in recent years.
- Offers valuable information on distressed securities investing since the 2007-2009 financial crisis
- Examines the opportunities and dilemmas for modern vulture investors
- Includes in-depth case studies of high-profile bankruptcies, including those of Chrysler Automotive and Tropicana Casinos and Resorts
By its very nature, investing in distressed companies can be a complicated and risky business. But once the dust settles, these investments can yield extraordinary profits. The Art of Vulture Investing puts this discipline in perspective and shows you how to excel at this difficult, yet rewarding, endeavor.
About the Author
GEORGE J. SCHULTZE is a highly regarded authority on distressed securities investing who has been active in this field since 1994. In 1998, he founded Schultze Asset Management, LLC to offer global clients an opportunity to co-invest through a variety of investment vehicles. He is a frequentspeaker at investment conferences and has been interviewed by journalists from Bloomberg, Fox, CNBC, TheStreet.com, CNN, the Wall Street Journal, the Dow Jones Daily Bankruptcy Review, and many others. He is a director of the Hedge Fund Association and is also active in philanthropic activities through the Schultze Foundation. Mr. Schultze earned MBA and JD degrees from Columbia University.
JANET LEWIS is a writer, editor, and marketing/PR consultant with more than twenty years of experiencecovering all aspects of finance. Ms. Lewis has written for publications in New York, London, and Paris including Fortune, the Banker, Global Finance, the European, Dealmaker, FX Week, where she served as European editor, and Institutional Investor, where she was associate editor.
Table of Contents
CHAPTER 1 Emerging from the Egg 1
CHAPTER 2 Learning to Scavenge 17
CHAPTER 3 Looking for Prey 39
CHAPTER 4 Waiting On a Limb 63
CHAPTER 5 Swooping In: Tropicana 73
CHAPTER 6 Fighting Over the Carcass: Chrysler 95
CHAPTER 7 Digesting the Remains 115
CHAPTER 8 A Vulture’s Philosophy 131
APPENDIX 1 Net Operating Loss Carry Forwards 139
APPENDIX 2 Copy of Continued Objection by Ad Hoc Committee of Washington Group Class 7 Claim Holders 141
APPENDIX 3 Letter to Washington Group’s Board of Directors 153
APPENDIX 4 Shareholder Complaint against Winn-Dixie Board et al. 157
APPENDIX 5 Objection by Schultze Asset Management to Owens Corning Disclosure Statement
About the Authors 185