Analyzing Investment Opportunities in Distressed and Bankrupt Companies: Thomas A. Bowman - 1991

Though the existence of securities of distressed and bankrupt companies is certainly not a recent phenomenon, the decade of the 1980s witnessed the highest corporate bond default rates of this century. As a result of a quality orientation on the part of many institutional investors in combination with the lack of a defined discipline for analyzing distressed securities, a “flight to quality” has caused major inefficiencies to occur in the market values of these securities. These proceedings, from a 1990 seminar titled “Analyzing Investment Opportunities in Distressed and Bankrupt Companies”, provide a valuable source of information about the characteristics of the market for these securities, the key issues that must be employed in their valuation, and techniques that are employed by professionals who are actively engaged in this specialized field.