DDIC Update and a Suggestion for Future Application Ideas (Stubs)

The Distressed Debt Investors Club (DDIC) was started in late 2009 to bring together some of the best analysts (buy and sell side) and portfolio managers from the distressed debt community.  Since the site launched, there has been over 400 investment ideas written up by our 175 active members (you can view a list of all the ideas here: DDIC Ideas) as well as nearly 500 topics in our members only forum.  These ideas compromise everything from traditional distressed debt ideas, to merger arbitrage, to deep value equities, to spin offs, and to shorts, just to name a few.  Members get a CLEAR advantage over buy side competitors because the ideas on the site are simply fantastic and truly alpha generating.  Just in the past few months we've had multiple ideas increase by 100%, and many ideas increase well over 20%.  New members get the benefit of over 2 years of research that has accumulated on the site that grows bigger everyday.  I could not be happier with the success of the site.

I have stated in the past that my goal for the site was 250 active members and I am sticking to that.  The current member list comes from some of the most well known hedge funds, mutual funds, and investment banks in the world.  For those that are not members, all users of the site are anonymous to one another - I am the only one that knows members identities and our privacy policy and terms of use policy insure users will be 100% anonymous to DDIC members and guests. I am humbled to be part of such a fantastic group.

Last year I hired a compliance consultant to advise us on all things compliance related.  I am very satisfied with their work and believe chief compliance consultants that I have talked to in the past few months would concur.   For those applicants that need assurance of our policies, I have written quite a few letters to compliance officers detailing our procedures and our compliance with relevant disclosures and regulation.

If you have questions on the site you are welcome email me.  And if you do not think membership is right for you, I encourage you to sign up as a guest where you are able to read ideas on the site on a 50 day delay.

One question I get often from potential applicants is: "What kind of idea are you looking for?  Can you give me a name?"  As the name implies, the DDIC separates itself from other investment communities in that we focus on the debt side of the balance sheet.  While there is somewhat of a paucity of distressed ideas out there right now, the one sort of idea that will surely move you ahead of other applications is the distressed stub idea.  For those that aren't participating in distressed on a daily basis, a stub piece is a legacy claim from a previous bankruptcy that could recover value from lawsuits and litigation, a reduction in the general unsecured pool, the liquidation of future non core assets, patent and IP value streams, among other things.  These ideas are generally complex and off the radar of many funds which makes them often mis-priced.  While applicants can apply with any distressed idea they see fit, those applying with a stub idea will get preferential treatment in the application review.  

For those interested, here is a list of ideas that I would look favorably upon:

Abitibi

Adelphia (all flavors)

Aventine

Bank New England

BankUnited

BearingPoint

Bowater

Budget Group

Capmark

Champion Enterprises

Chemtura

CHS Electroncs

Delphi

Delphi

Eddie Bauer

Fairpoint

Fedders

Fleetwood

Fleming

Friede Gold

General Maritime

Grubb & Ellis

Idearc Bond Stub

Idearc Claim Stub

Indalex

KEMPER

LandAmerica Financial Group

Lear Bonds (old)

Linens N' Things

Local Insight Regatta

MFGI Stub

Midway Games

Mirant

Natoinal Steel

Nell (LYO)

Outboard Marine

Quality Stores

Quebecor

RJ Tower

RSL Communications

Scotia Pacific

SemGroup Bonds

Smurfit

Spansion

Spheris

Technical Olympic

Teleglobe

Thornburg

Verasun

Vion Pharmaceuticals

Washington Group

World Access

World Color USA
(and if you know of any I'm missing, I'd love to hear them)

For a stub, a typical write up would be 3 pages, that would encompass a situation overview, the driver of stub value, a simple (or complex model), and your assessment of probabilities, expected value, and ultimate recovery.  

I am trying my best to make this the absolute best community of investors out there.  I have no doubt in ten years the DDIC will be going strong with a database of distressed debt research that would be without compare.  If you have questions on the site or the application process, please email me at hunter [at] distressed-debt-investing [dot] com