Distressed Debt Concessions

When investing in distressed debt, one has to be aware that negotiations can affect a creditor's ultimate recovery - for the good or the bad.

Why does this dynamic occur? More appropriately, what influences a creditor's decision to negotiate in a bankruptcy proceeding? As noted quite often in this blog, the bankruptcy process is expensive. Lawyers are billing upwards of $1000/hour. If a certain creditor class wants to expedite the bankruptcy approval process, they may give up some "nuisance value" to junior creditors to get their support.

In addition, in the wake of fraudulent conveyance rulings, senior creditors, specifically at the bank debt level, do not want to see their liens extinguished by a litigation from subordinated creditors. So they have even more incentive to offer up a little value to get junior creditors to play ball with a confirming bankruptcy plan.

The bankruptcy case of Idearc, which we spoke about quite a long time ago (Idearc Bankruptcy), is an example of negotiations among various creditor classes. Here is the new proposed Idearc bankruptcy plan.

As you can see on page 22 of 50 of the file, the plan outlines the treatment of Class 4 Claims, which in this case represents, the unsecured bond holders. Furthermore, we can see the edits on this document:

1. Bondholders were to get 5% of the new common stock - They are now getting 15%
2. Bondholders were to receive no cash - They are now getting $120M

Why did this happen? If you have been following the Idearc bankruptcy, you would have known that MatlinPatterson and the unsecured creditors, via the Unsecured Creditor Committee, was challenging the bank debt lenders and the bank debt agent on possible unencumbered assets at Idearc (from the docket):

The Creditors’ Committee commenced this adversary proceeding in order to challenge certain of the Agent’s liens and the valuation and allocation of the Debtors’ unencumbered property, if any, pursuant to the Debtors’ proposed plan of reorganization. The Creditors’ Committee contended that there are significant unencumbered assets, including the Debtors’ copyrights and related revenue streams, and rights to use the Verizon brand, as well as post-petition revenue streams, and that the value of such assets should be distributed to unsecured creditors. The Agent rejected the Creditors’ Committee’s contentions, maintaining that (a) the Agent held a perfected pre-petition lien, for the benefit of the Lenders, on substantially all of the Debtors’ assets, (b) the Creditors’ Committee’s challenges to the Agent’s liens on the Verizon brand and the revenues associated with the Debtors’ copyrights were without any merit, (c) the value of the Debtors’ copyrights were de minimis, and (d) the challenge to the Agent’s lien on post-petition revenues was defeated, among other things, by the diminution in value of the Debtors’ estates since the bankruptcy filing, and the Agent’s right to be adequately protected by receiving a post-petition replacement lien on whatever unencumbered property existed. This litigation ensued, extensive discovery was taken, and trial commenced and was conducted on November 9th and 10th.

Now, I have no opinion one way or the other on the validity of these claims. I do know, though, that these claims brought the various creditor parties to the table to work out an "amicable" solution. A lengthy litigation may have dragged the bankruptcy process on substantially longer, thereby accruing more lawyer fees, and possibly harming the underlying business of Idearc

The docket continues:

Now, following the commencement of trial on the myriad legal and factual issues implicated in this dispute, the Parties have reached a global resolution of all issues. The Settlement described herein preserves a significant recovery to the Lenders on account of their secured claims, while significantly increasing the consideration to be paid to Class 4 unsecured creditors under the Debtors’ plan of reorganization, and paves the way for the Debtors’ prompt emergence from Chapter 11.

So, to drop their dispute, the Class 4 creditors (the bond holders), got the aforementioned benefits: $120M in cash and a large percentage of the post-re org equity. In addition, the new bankruptcy plan has the support of a large creditor class thereby bringing the confirmation of the case that much closer.

Who won out in this exchange? In all honesty, probably everyone won out - except the bankruptcy lawyers. Note holders get a bump in recovery (the bonds have been gradually trading up over the last 3 months), bank debt holders do not have to worry about losing massive value, and the company will emerge from bankruptcy faster. Win/Win for all.

Happy Thanksgiving from Distressed Debt Investing!

Distressed Debt Recommendations from Citigroup

This past Tuesday, Citigroup’s distressed analysts presented their respective top picks to a large audience at the company’s high yield conference. As one would expect from a “flow shop” most of the names discussed were very high profile companies with large capital structures. While there were no “hidden gems” unearthed, their team did a great job of elucidating their points. The presentations opened my eyes (wider) to a couple of situations I had previously written off as not worth the trouble. The following is a list of their top picks with a brief synopsis of their thoughts.

AMERICAN GENERAL

• Positive on the entire cap structure (bank debt YTM = 14.5%; bonds 13-14%)
• Not just a sub-prime portfolio – had a different business than most because they knew they were keeping the loans being made
• Thinks they are able to handle the July 2010 bank debt maturity through internal liquidity, bank group extension, or a loan/cash from AIG given the ILFC precedent

CIT GROUP

• Like the steering committee loans because they have ‘B’ yields for ‘BB’ risk
• Thinks the Series B Notes go to par upon emergence
• Estimates $6 bln of book equity, which implies 18 points of additional bond value
• New notes should return 20+% over next 6 months

CHEMTURA

• Bonds trade at 107 area, downside is your claim
• 2016 Notes are structurally senior to other notes
• IF EV > 1.2 bln then you get par on the 2016s
• Upside comes from equity value
• Risk is that you are taken out for cash or reinstated somehow

GM / MOTORS LIQUIDATION

• (Note that GM bonds were marching up to 23 from 17 throughout this day)
• Base case recovery is 29.5
• Q3 #’s show they are ahead of plan
• GM bonds cheaper than Ford equity
• Macro bet on the economy

LEHMAN

• (Citi’s analyst did an amazing job with this presentation. He gave out a 30 page slide deck that I would highly recommend for those with Citi coverage. The bullets below are from the first page alone!)
• Resolution of Lehman’s many estates will be very difficult and there is no way to determine assets and claims with precision
• However, there is enough information to set reliable ranges for many variables
• Estimate base case recoveries of 25-32
• Recovery is most sensitive to changes in asset value assumption, setoff and collection
• Time to distribution and discount rate are next most important drivers

Distressed Debt Example - Accuride

The applications for the Distressed Debt Investors Club continue to roll in. As noted in previous posts, I am trying to stagger the number of people I admit so people that are just learning about the club get a fair chance to apply through the end of the year and into early 2010. That being said, if you have not heard from me one way or the other regarding your membership status, please give me a few more weeks to wade through all the applications.

Currently 40 members have been admitted from a wide range of hedge funds and buy and sell side shops. You would know most of these funds. The strength of the site is the community that is developing - that and the amount and quality of ideas presented to members. I have already learned of three or four situations that I had never even heard of that look to be quite lucrative.

Here is an example of an idea from one of the members of the site:

Accuride

Synopsis:

Accuride filed for a pre-negotiated bankruptcy on October 8, 2009. The proposed plan gives 95% of the re-org equity to the Sub Note holders. The company's operating assets are conservatively worth $715 mln ($130 mln EBITDA x 5.5x EV multiple). As planned by the POR, a $715 mln EV implies an equity value of ~$537 mln. As such, 95% of the new equity would be worth approximately ~$510 mln, providing a 42% return (on all capital invested). The investment's IRR would be materially higher than 42% as the rights offering purchase of the convertible notes would take place at emergence

Investment Thesis:

COMPANY DESCRIPTION:

Accuride is a North American manufacturer and supplier of commercial vehicle components. The company’s products include commercial vehicle wheels, wheel-end components and assemblies, truck body and chassis parts, seating assemblies and other commercial vehicle components. Accuride management believes the company has #1 or #2 market shares in nearly all of its major product lines. The company’s primary customers are commercial vehicle OEMs, namely Daimler Truck, PACCAR, International Truck and Volvo/Mack. Accuride operates 19 facilities in the U.S., Canada and Mexico and employs nearly 3,000 people. (Source: 2008 10k)

PATH TO BANKRUPTCY:

The commercial vehicle industry, already well-known as a “deep cyclical”, is suffering from its lowest demand levels in recent history. Class 8 truck production is expected to be ~116k vehicles in 2009, down nearly 50% from the past two years. As a commercial vehicle parts supplier, Accuride’s top line has suffered accordingly. For example, the company’s second quarter sales were down 45% y/y. As a result, the company was in violation of its financial covenants under its credit agreement at the end of the second quarter. On July 8, Accuride entered into the first of what would later become five temporary waivers with its credit facility lenders. Additionally, Accuride missed the August 3 coupon payment to its subordinated note holders. On August 31 the company entered into the first of a series of forbearance agreements with its bondholders. Accuride filed for bankruptcy (Delaware) on October 8. The pre-negotiated filing includes a support agreement with 57% (principal amt) of the credit agreement lenders and 70% (principal amt) of the noteholders.

PRE-NEGOTIATED PLAN:

The proposed plan has six key components:

a) $50 mln of a two-tranche new money DIP

b) The pre-petition credit agreement loans will be amended and re-instated

c) The pre-petition notes will be cancelled in exchange for 98% of post re-org equity (subj. to dilution)

d) A $140 mln rights offering of new senior unsecured notes convertible into 60% of the post re-org equity. The rights offering is available to the Sub Note holders and backstopped by the plan supporters

e) The proceeds from the rights offering will be used, in part, to repay the $70 mln “Last-out Loans” made by Sun Capital

f) The pre-petition equity holders will receive 2% of the new equity warrants for up to 15% of the company, subject to further dilution

VALUATION:

Accuride’s enterprise value is conservatively worth $715 mln based on a $130 mln (mid-cycle) EBITDA and a 5.5x enterprise value multiple. I estimate that the new company will have $110 mln of cash at emergence, reducing net debt and increasing equity value.

Mid-cycle EBITDA estimate = $130 mln

- During Accuride’s last trough-to-peak cycle (2002-2006) the company’s EBITDA averaged nearly $120 mln (source: company financials)

- Based on management projections the 2009-2013 trough-to-peak cycle will see average EBITDA of $139 mln (source: 8k filed 10/15/2009)

- Also note that free cash flow should be stronger than in the past as management projects lower than historical capital expenditures (obviously cash interest will be much lower given the new capital structure)

Enterprise value multiple = 5.5x

- Accuride only has a handful of semi-relevant peers. In descending order of relevance I believe the best comps are ArvinMeritor (5.6x 2011E), Allison Transmission (> 6.5x), and Navistar (6.0x). Purchasing AURD 8.5s at $80 “creates the company” at just over 4.0x my mid-cycle EBITDA estimate. Also note that the exit multiple of 5.5x is below that of each peer. Further, I believe new Accuride should trade at a premium to a company such as ArvinMeritor.

RISKS:

- I think there is very limited “plan risk” in this situation, however, if the pre-negotiated plan were to fall apart significant delays could occur, which would negatively affect the estate as a prolonged bankruptcy could cause the OEMs to seek out replacement suppliers.

- Valuation risk should be limited given the conservatism built into my valuation. That said, a lack of confidence in the prospects for the commercial vehicle industry could reduce multiples for Accuride and its peers.

RECOMMENDATION:

Buy Accuride Subs and participate fully in the rights offering. Accuride is a textbook example of a good business with a bad balance sheet. The company has leading market shares in its core products and has delivered low-single-digit operating margins over the past ten years. The model below shows my recovery estimates more explicitly. Note that I am assuming the New Converts are indeed converted on issuance, as is allowed according to the term sheet.

100th Distressed Debt Investing Post

The most recent post marks the 100th post at Distressed Debt Investing. We could not do have done it without the wonderful support, commentary, and (sometimes) criticism of our readers. We hope to continue to bring you the best commentary and learning tool in relation to Distressed Debt out there.

If you do not mind, please take a quick second to answer our poll below (you can select up to two choices). This will help us to continue tailoring our content to suit reader's needs.

Thanks again,

Hunter

Interesting Thoughts from a Credit Trader

A friend sent me this commentary from a credit trader at Deutsche Bank. Quite interesting commentary, especially given where credit spreads have moved in from:

In the past month we have been traveling a lot visiting clients and co-workers across the globe. The purpose of this was twofold, first we wanted to sell the New DB to the world. In our opinion we have built the best trading desk on the street and we have made great progress in converting ourself into a flow desk selling idea's and providing liquidity. Second we wanted to get a first hand snapshot of the new buy-side landscape, clearly the world has changed in the past year and we wanted see and talk to some of the new and old players that make up the new mkt. Although we have many more clients to see we would like to provide you with some interesting take aways from my trips.

1) CASH The cash on the sidelines is real and building, there is still billions of dollars on the sidelines and the number is growing everyday. Coupons and bonds rolling off are creating 100mm's a day at individual insurance companies on top fo the billions they already had, this cash may or may not be invested into the credit mkt's but its there and praying for a back up in spreads to deploy into credit. Many accounts are still seeing new mandates flow into the credit space including pension money being allocated to credit from equities thus the buying of 30yrs. There is no indication that the cash on the sidelines and the cash still coming into credit will change any time in 2010.

2) The dollar, rates and spreads We found it interesting that outside the US they are much more bullish on the dollar than many accounts we saw in the US. The dollar and its potential negative impact on rates was given by many US accounts as one the main risks to a continued recovery. We spoke to several European accounts about dollar mandates they either had or were close to getting, if you look at US spreads vs Euro or Sterling mkts its clear why they are interested in dollar debt. Almost everyone expected rates to be much higher at the end of 2010 than today, and that is why the new issue books for front end bonds is out of control. We did not find many accounts that thought spreads would be wider, almost everyone thought that IGs could get to the 60-70 area. That being said most accounts were looking at HY for performance next year, and many spoke about having compression trades on.

3) Basis and leverage We found more basis buyers and we were told by many that they expect basis to go from negative to positive in 2010, and we now have more accounts looking for HY basis than in the past few months. More than a few mkt participants spoke of having more leverage at their disposal now than they have had for some time. Very few thought that the correlation mkt would come back in the form it had but most thought the need for yield in the second half of the year would produce some bespokes with small amounts of leverage. Just a few weeks ago we got hit on some 8yr cds vs a new deal being done, the mkt was split on if that was a one of or if we will see more deals.

Distressed Debt Investing Loves the LSTA

The LSTA (Loan Syndication and Trading Association) is a group that I really adore. From their website, "The LSTA undertakes a wide variety of activities to foster the development of policies and market practices designed to promote just and equitable marketplace principles and to encourage cooperation and coordination with firms facilitating transactions in loans and related claims."

And why do we adore them? Because, they put their presentations on the web, for all to see. Please follow links to see presentations from their 14th Annual Conference: The Future of the Leveraged Loan Market. I will have commentary on these over the next few weeks.

The Future of the Leveraged Loan Market

Secondary Trading, Pricing and Liquidity

Restructuring: Then & Now

Loan Defaults and Credit Quality

The Future of CLO?

Life After CLO - Where is the Loan Demand Coming From?

Current Legal Themes Affecting the Loan Market Today

Navigating FAS 157

Closing and Settling Loans Today

Recent Legal Developments in the Secondary Loan Market

Investment Grade Loan Update

Distressed Debt Investors Club Update

Last week we announced the launching of the Distressed Debt Investor Club. I am happy to say that we are getting more members and guest applications than we had ever expected at this point. Remember, the goal of this group is not to bring in thousands of people to crank ideas out left and right. Given the choice between quantity and quality, I will always choose the latter.

I am trying to establish a group of the top high yield, distressed debt, and event driven portfolio managers and analysts (buy-side and sell-side) where information is valuable and can be relied upon. That is why there is an application process. I want to be able to rely on the DDIC and its members to produce alpha generating ideas up and down the capital structure.

And, in the illiquid securities that many of us distressed debt investors deal with on a daily basis, having TOO many eyeballs on a particular situation is self-defeating.

Right now, the only users on the site are the beta testers. I have gone through about 25% of the applications at this point and expect to get the balance done through the weekend. By Wednesday of next week (I will be at G2E on Monday and Tuesday), I expect to invite a number of applicants to become members of the site. And by the end of the year, I hope to have at least 50% of the 250 total spots filled with high caliber professionals sharing and bouncing ideas off one another.

To give you a flavor of some of the applications, here is just a sample of situations that have been submitted for applications:

General Growth Properties

Blockbuster

Accuride

Smurfit-Stone

CCRT

Alion

Reader's Digest

ILFC

True Temper Sports

Horizon Lines

And about 30 other truly fantastic opportunities ranging from equity shorts to distressed debt long.

If you would like to apply, please visit the Distressed Debt Investors Club. We hope to see you there.

A Call for Help

I recently learned that Alan Cohen, the head of credit and distressed debt investing at York Capital Management, is suffering from leukemia. Many of us in the distressed community have worked with or know Alan and his team at York - simply incredible people.

Alan is in need of a blood stem cell match. If you are in New York City, there will be a match drive at York Capital Management on November 19th. Please contact me for details. I really hope to see you there.

If you are outside of New York City, you can visit the National Marrow Donor Program for more details on where and how you can become a possible bone marrow donor (all that's required is a saliva sample) and possibly make a life-saving transplant possible.

Please forward this to all those interested - the more people we get out, the better.

Thanks -

Hunter

Baupost Annual Meeting Notes

A number of readers have sent me notes from Baupost's 1st Annual Meeting since the founding of the firm this past October. I have taken out information such as current portfolio weightings and other things that are not educational in the purest sense.

*Unfortunately: Notes taken down by request of the author.

Distressed Debt Investing Interview with Miguel Barbosa

Earlier this week, Miguel Barbosa of the fantastic blog Simoleon Sense, a blog on value investing and behavioral finance, did an interview with me where I answered some broader questions about my background and investment process. I very much enjoyed my time with Miguel and hope readers will too enjoy the interview.

To access the interview, click here: Distressed Debt Interview on Simoleon Sense

Fraudulent Conveyance

Before getting to our lesson on fraudulent conveyance, I would like thank those that have applied to the Distressed Debt Investors Club. The rate of applications coming in is better than I expected. I am humbled by the response of our readers. Remember, we will take applications through next weekend before the site is opened up to admitted members. Apply soon!

This post continues our series of Advanced Distressed Debt Topics. You can find the first two posts at:

Advanced Distressed Debt Lesson #1

Advanced Distressed Debt Lesson #2

This week we are going to be discussing fraudulent conveyance. Section 548 of the bankruptcy code deals with transactions that are fraudulently made. While malicious transfers are also dealt with in the bankruptcy code (i.e. doing something purposefully to malign creditors), we are going to be focusing on the more "practical" kind of fraudulent conveyance.

Now, I know this is technical. And believe me, it will get more technical. But the concept of fraudulent conveyance is literally never more important than it is today. Why? The simple reason: The Tousa Ruling. Here is the relevant docket and the actual fraudulent conveyance ruling by the judge.

The ruling is 182 pages. I am not going to do it the mis-justice of simply summarizing it in a few lines. For those that really want to understand how judges make decisions in these sorts of cases, it is imperative you read the ruling.

To prove a transfer is fraudulent, one must not only prove the absence of reasonably equivalent value granted, but also that the entity doing the transfer was insolvent at the time. Section 548 of the bankruptcy code looks back 2 years - so in addition to the two concepts above, this transfer must have also happened in the last two years.

If you look at the docket mentioned above, you will see a litany of appeals and "clarifications of judgement and order" as well as "findings of fact" which are all actions that try to reverse this judge's decisions. They are all fascinating reads. I am going to pull out 7 or 8 blocks of text from various filings and comment on them as I think that will enlighten the readers the most. But first, just a little background on the case.

In July of 2007, Tousa, a homebuilder, borrowed $500M and granted lenders security in all their assets. This capital was used to settle litigation against Tousa and one of its subsidiaries (Transeastern) because of a default at the Transeastern JV. The problem was, Tousa had other subsidiaries, that were not party to the litigation / lawsuit. Tousa, and subsidiaries subsequently filed for bankruptcy in January 2008. The creditor committee, i.e. those holding unsecured claims against Tousa, was seeking to avoid the $500M debt/lien obligation and avoid liens on a tax refund issued in 2007.

As a quick summary, and this is a broad based statement, but I am going with it: If a lien is shown to be "fraudulent", that lien is effectively worthless. That means a secured creditor would now be an unsecured creditor. This is important because now instead of getting a piece of the pie after the secured lenders get paid off, everyone gets their fair share.

A simple example will suffice:

Say a company has $100M in assets. This company also has $100M in debt secured against those assets and $100M of unsecured debt. With a simple bankruptcy waterfall we see that the secured lenders will get 100% of their claim ($100M of assets / $100M of secured debt) and unsecured creditors will get 0% of their claim ($0M of remaining assets / $100M of unsecured claims).

Now lets say those liens are worthless. The $100M of assets would now be split between $200M of unsecured claims ($100M voided secured debt + $100M of unsecured debt) with a recovery of 50 cents on the dollar for each. With liens, unsecured lenders are getting donuts. Without the liens, they are getting 50 cents on the dollar back.

In this 182 page ruling, the judge lays out the case/reasoning behind the claims he is postulating. For example, he lays out the housing downturn and the effect it had on Tousa's business, including management communication with advisers and investors at the times. My favorite:

In a May 25, 2007 email to himself, Wagman stated that TOUSA “will fail” to satisfy covenants in its bond indentures “into late 2008 or 2009. Not even close.” Ex. 2113 at 1-2 (emphasis added). He noted the view of the rating agencies that the homebuilding industry was “grim and getting grimmer,” with downward pressure on prices and margins. He wrote, "As CFO, and in light of all of this market uncertainty, I have absolutely no desire to fly this plane too close to the ground, achieve some from [sic] of consensual settlement today and crash within the upcoming year. That would be a clusterf*ck."

I really hope I'm not the only one that thinks this line is incredible.

The judge continues discussing "contemporaneous evidence" suggesting that the Tousa subs were insolvent at the July transaction, they were left MORE insolvent as a result of said transaction, left them too small a capital base, and left them unable to pay their debts as they matured.

For example: "Prior to the July 31 transaction, Citi harbored significant doubts about TOUSA’s solvency, but – motivated by the prospect of substantial fee income – pressed forward nonetheless" ... Quoting from the ruling

"Citi saw the proposed new financing as a highly attractive opportunity for fees. In a March 23, 2007 email, Citi employees discussed their strategy of structuring the deal so that, even in a worst-case scenario, Citi would lose less than its fees. Citi ultimately collected approximately $15 million in fees for the transaction, including funds paid to its advisers by TOUSA. Citi was keenly aware of its ultimate goal. In early March 2007, when TOUSA requested an amendment of the Revolver to relax the interest coverage ratio and avoid a going concern opinion from its auditors, Citi assented to modifying the covenants because “[a] going concern [opinion] would not be

particularly helpful in putting in place the $1.2B financing we’re working on, as you know, and for which we are slated to earn roughly $8mm in fees."

The judge goes on like this for quite some time, getting into things as deep as not being able to trust a certain expert's witness testimony or the use of certain discount rates when doing a valuation. Deep deep stuff.

Moving to the "Conclusions of Law" section where the judge lays out his ruling in relation to the bankruptcy code, we can start to figure out what all this fraudulent transfer talk really means. For example

"Section 548(a)(1)(B) permits the avoidance of any transfer of an interest of the debtor in property, or any obligation incurred by the debtor, that was made or incurred within 2 years before the date of filing of the petition, if the debtor voluntarily or involuntarily received less than a reasonably equivalent value in exchange for such transfer or obligation and (A) was insolvent on the date that such transfer was made or such obligation was incurred, or became insolvent as a result of such transfer or obligation, (B) was engaged in a business or transaction, or was about to engage in a business or transaction, for which any property remaining with the debtor was an unreasonably small capital; or (C) intended to incur, or believed that the debtor would incur, debts that would be beyond the debtor’s ability to pay as such debts matured. 11 U.S.C. § 548(a)(1)(B)."

And using the law, the judge discusses the evidence and arguments laid out (like in the examples above) to show that point A, B, and C of USC 548(a)(1)(B) was indeed the case at Tousa. This continues going deeper and deeper, digging into what "unreasonably small capital" means for example, or how the inability to pay debts can be shown. This is great learning for all those interested.

In the end, the judge ruled that all claims of the First and Second Lien Lenders (from the July 2007 transaction) and all liens granted by the subsidiaries are to be avoided and disallowed (i.e. everyone is unsecured). ALSO, the judge ruled that the Transeastern lenders (that had gotten paid back with the $500M July 2007 deal) need to disgorge to the subsidiaries $403M plus interest. Yes, you thought you got paid out, but now I want the money back. And to knock them in the teeth, the tax refund liens were also disgorged.

Now, as I mentioned, everyone is appealing this thing. Everyone. And tomorrow, we will look at their reasoning and the arguments they are making. This fraudulent conveyance case has wide reaching implications for distressed debt investors in the future (and current cases as well). We will also discuss that tomorrow.

A few quick tips when applying to the DDIC

We are very excited with the launch of the Distressed Debt Investors Club. A few very quick points about the application:

1. We encourage you to use the Attachment Option when submitting your application. This makes it easier for us to sort through certain applications.
2. The Synopsis section: Try to keep it a reasonable length. 4 sentences is the most preferable.
3. When cut and copying into our editor from Excel or Word, 95% of you will be able to use a simple CTRL V...if that does not work, please use the editor to select "Paste from Word"
4. When pasting, and our editor asks you "Would you like to clean formats?" Selecting no is probably your best bet.
5. And finally - Despite constant tweaking and fixes, we are getting an error that involves the term "&nbsp" in the editor (as an aside, if anyone is a techie and can enlighten me why this is...let me know). If you submit your preview of your application, and that term is scattered through the document, simply submit it like that, and I will go and clean it up as it shows clear on my side.
6. Try to keep your synopsis to plain text (i.e. no bullet points, tables) ... makes the site look a lot cleaner!

Thanks again - and I hope to see your application.

-Hunter

The Distressed Debt Investors Club

A few years ago, a number of distressed debt professionals, myself included, sat down and sketched out an idea of a community of investors dedicated to sharing ideas and helping each other navigate the sometimes mine-filled path of the distressed debt world.

I am pleased to announce: That community is ready to launch. After a number of months of planning, tweaking, and beta testing (thank you beta testers!), we are ready to launch the site.

The Distressed Debt Investors Club will be THE community of top investors and analysts in the distressed debt and high yield investing fields. As stated previously, members are selected by the strength of their application and the thought process going into the investment idea. Only 250 members will be admitted to the club.

Over the next week or so, we will take applications and then admit all those accepted to the site at the same time. This will allow each member to see other admitted applicant's ideas and thus begin the process of idea generation and sharing.

For those looking for more information, here is the FAQ

We sincerely hope you apply. If you have questions, feel free to shoot me an email at hunter[at]distressed-debt-investing[dot]com.