From the Inside Flap
Since the publication of the last edition of
Corporate Financial Distress and Bankruptcy in 1993—considered by many to be the most authoritative finance book on this topic—the fields of corporate distress and bankruptcy, as well as related markets dealing with high-yield and distressed debt, have undergone enormous growth and change. Today, there's no doubt that bankruptcy is a big business, and over the last decade both professionals and academics have become increasingly interested in the activities surrounding this phenomenon.
In this newly revised Third Edition of Corporate Financial Distress and Bankruptcy, credit and corporate bankruptcy experts Ed Altman and Edith Hotchkiss update and expand the discussion of corporate distress and bankruptcy, as well as the related markets dealing with high-yield and distressed debt. In addition to expanded empirical and descriptive aspects of bankruptcy and credit analysis, this Third Edition offers state-of-the-art analysis and research on the costs of bankruptcy, credit default prediction, bankruptcy and distressed restructuring, and the post-emergence period performance of bankrupt firms.
Divided into two comprehensive sections, Corporate Financial Distress and Bankruptcy, Third Edition addresses a number of key issues central to your understanding of the restructuring process in Section One and deals with the development and implications of models built to classify and predict corporate distress in Section Two. Specific topics covered in the opening section include:
- An introduction to, and statistical background of, corporate distress and bankruptcy
- Evolution of the U.S. Bankruptcy Code, including the Bankruptcy Reform Act of 2005, and international comparisons
- Post–Chapter 11 performance
- Distressed firm valuation
- Highly leveraged restructurings
- Investing in distressed securities
- The high-yield bond market: risks and returns for investors and analysts
- Corporate governance in distressed firms
In Section Two, models for estimating default probabilities are discussed, followed by explanations of their applications to many different scenarios, including distressed debt investing, turnaround management and other advisory capacities, and legal issues. With respect to the discipline of turnaround management, you'll become familiar with the possibility of using distressed firm predictive models—for example the Z-Score approach—to assist the management of the distressed firm itself and facilitate its return to financial health.
Filled with in-depth insight and practical advice, Corporate Financial Distress and Bankruptcy, Third Edition offers a well-rounded look at the growth and evolution of distressed debt, corporate bankruptcy and credit risk in today's dynamic business environment.
From the Back Cover
Praise for Corporate Financial Distress and Bankruptcy THIRD EDITION"The masters return! The new edition of this definitive treatment of the markets for distressed and bankrupt debt reflects the dramatic recent changes in the market, including the implications of the amazing episode of defaults that occurred in 2001–2002. The authors continue to provide depth and breadth of coverage, including in-depth analyses of default prediction and recovery in default. The book will be particularly valuable for MBA students and professional investors."
—Darrell Duffie, James I. Miller Professor of Finance, Graduate School of Business, Stanford University
"After thirty years of distressed securities investing, I was pleasantly surprised that I learned something new from every chapter of this book. It should be required reading for everyone from students to the most experienced practitioner."
—Wilbur L. Ross, Chairman, WL Ross & Co. LLC
"A must-read for business students and professionals involved with corporate bonds or loans. Altman and Hotchkiss do an excellent job of covering a broad range of aspects of corporate distress. The information is indispensable for investors and executives alike."
—Allan A. Brown, Cohead of Distressed Debt Trading, Concordia Advisors LLC
"All who work, study, invest, or otherwise find themselves involved with this topic will want to add this book to their library. I certainly will."
—Ben Branch, Professor of Finance, Isenberg School of Management, University of Massachusetts
"Corporate Financial Distress and Bankruptcy is an invaluable compendium of methodology, data, and history. The authors do a splendid job of explaining theory to the practitioner and the practical side of bankruptcy to theoreticians."
—Martin Fridson, Publisher, Leverage World
"A thorough, comprehensive treatment of corporate financial distress and credit risk by long-standing experts in the field. Invaluable for those involved in fixed-income securities and in distress restructuring."
—James C. Van Horne, A.P. Giannini Professor of Banking and Finance, Graduate School of Business, Stanford University
"Altman and Hotchkiss have updated the leading text on bankruptcy, risk-return relationships for distressed debt, and the theory and application of distress prediction models."
—J. Fred Weston, Professor of Finance Emeritus, recalled, at The Anderson School at UCLA, and past president of both the American Finance Association and the Financial Management Association International
