Customer Reviews

Corporate Financial Distress and Bankruptcy: Predict and Avoid Bankruptcy, Analyze and Invest in Distressed Debt , 3rd Edition

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High quality data and right up to date (Autumn 2006). The book is helpfully divided into two parts ~ the first half explains many of the useful topics needed to understand restructured debt and corporate distress and the second half gives detailed advice on building or understanding typical models on default probablities and the risk return assessment of distressed debt together with practical examples of valuing distressed companies and their debt. It also includes summaries of the legal implications, but there are much better books on that subject. I thought this was good value for the money.

Most people in the investing world don't read this book. But they should. It's a textbook so not something to breeze through at the beach. However, the techniques described in the book are very applicable to any company, not just those in disress or bankruptcy. In fact I did some work on EMC many years ago when they *appeared* to be growing rapidly but in reality they were getting into trouble. This was way back in the early 1990's when the stock collapsed from $78. Having shared my analysis with Wall Street types at the time I soon found myself there!

The main point is you can use this type of analysis effectively and because most people in general equity investing don't, it just might give you a bit more edge.

I'm a beginner to investing in distressed debt and bankrupt companies so this book was a good introduction for me. I did wish there was a bit more detail on valuing and buying the bonds of distressed and bankrupt companies, but the book provided a good overview of the legal process and did provide some very valuable tables of default rates and historical risk levels.

The authors could have eliminated some of the academic discussions of competing theories of valuation and market theories. I'd love to find a book that really took a step by step practical approach for the small investor looking to buy distressed debt (much like The Intelligent Investor did for equities), but this was a great start and well worth reading for the beginner.