Distressed Debt Markets

Distressed Debt Markets: Distressed debt markets refer to the financial markets where the debt of companies that are experiencing financial distress is traded. These markets provide an avenue for investors to buy debt at a discount in the hopes of making a profit either through restructuring or liquidation of the distressed company.

Restructuring: Restructuring is the process of changing the financial, operational, or organizational structure of a company in order to make it more profitable or sustainable. In the context of distressed debt markets, restructuring often involves renegotiating the terms of the debt to make it more manageable for the company.

Reorganization: Reorganization is a more formal process than restructuring that involves restructuring a company's ownership, operations, or structure. Reorganization can occur both in and out of court, with the goal of resolving financial distress and improving the company's financial health.

Bankruptcy: Bankruptcy is a legal process that allows individuals or companies to seek relief from their debts when they are unable to pay them. Bankruptcy can be initiated voluntarily by the debtor (Chapter 11) or involuntarily by creditors (Chapter 7 or Chapter 13).

Chapter 11: Chapter 11 bankruptcy is a form of bankruptcy that allows a company to reorganize its debts and operations while continuing to operate its business. This chapter of the bankruptcy code is often used by larger companies that want to continue operating rather than liquidating.

Chapter 7: Chapter 7 bankruptcy is a form of bankruptcy that involves the liquidation of a company's assets to pay off its debts. This chapter is often used by smaller companies or individuals who do not have the means to reorganize their debts.

Chapter 13: Chapter 13 bankruptcy is a form of bankruptcy that allows individuals with a regular income to restructure their debts and create a repayment plan over three to five years. This chapter is often used by individuals who want to keep their assets but need help managing their debts.

Distressed Debt: Distressed debt refers to the debt of a company that is in financial distress or at risk of defaulting on its obligations. Distressed debt is often sold at a discount to its face value because of the higher risk associated with investing in it.

Distressed Debt Investor: A distressed debt investor is an individual or institution that specializes in investing in the debt of financially distressed companies. These investors often buy distressed debt at a discount with the goal of turning a profit through restructuring or liquidation.

Default: Default occurs when a borrower fails to make a scheduled payment on a debt obligation. Defaults can lead to a variety of consequences depending on the terms of the debt agreement, including foreclosure, bankruptcy, or restructuring.

Loan-to-Own Strategy: The loan-to-own strategy is a distressed debt investment strategy where investors buy up a company's debt with the goal of converting it into equity and gaining control of the company. This strategy is often used by distressed debt investors looking to take over a company through its debt.

Debtor-in-Possession (DIP) Financing: DIP financing is a form of financing provided to a company in Chapter 11 bankruptcy that allows it to continue operating while restructuring its debts. DIP financing is often provided by existing creditors or third-party lenders.

Workout: A workout is a negotiated agreement between a debtor and its creditors to restructure debt outside of bankruptcy. Workouts are often used to avoid the formal bankruptcy process and can involve changes to the terms of the debt or the repayment schedule.

Creditor: A creditor is an individual or institution that lends money to a borrower in exchange for the promise of repayment with interest. In the context of distressed debt markets, creditors may be involved in restructuring or liquidating a company's debt.

Collateral: Collateral is an asset that a borrower offers to a lender as security for a loan. If the borrower defaults on the loan, the lender can seize the collateral to recover its investment. Collateral plays a significant role in distressed debt markets as it affects the recovery value of the debt.

Senior Debt: Senior debt is debt that has priority over other debts in the event of liquidation or bankruptcy. Senior debt holders are first in line to be repaid from the proceeds of the sale of a company's assets.

Subordinated Debt: Subordinated debt is debt that has a lower priority than senior debt in the event of liquidation or bankruptcy. Subordinated debt holders are only repaid after senior debt holders have been satisfied.

Distressed Exchange: A distressed exchange is a transaction where a company offers its creditors new debt or equity in exchange for their existing debt at a discount. Distressed exchanges are often used to avoid bankruptcy and restructure a company's debts.

Distressed Asset: A distressed asset is an asset that is being sold at a significant discount due to the financial distress of the seller. Distressed assets can include real estate, securities, or loans.

Liquidation: Liquidation is the process of selling off a company's assets to pay off its debts. In the context of distressed debt markets, liquidation may occur if a company is unable to restructure its debts successfully.

Special Situations: Special situations refer to investments in distressed debt or other opportunities that are outside of the mainstream markets. Special situations investors often look for unique opportunities to profit from mispricings or inefficiencies in the market.

Distressed Fund: A distressed fund is a type of investment fund that specializes in investing in distressed debt or other distressed assets. These funds often have a higher risk tolerance and seek to profit from the mispricing of distressed assets.

Stressed Debt: Stressed debt refers to debt that is under financial pressure but has not yet reached the level of distress. Stressed debt may be trading at a discount due to concerns about the borrower's ability to repay its obligations.

Recovery Rate: The recovery rate is the percentage of a defaulted debt that is recovered by creditors through restructuring or liquidation. Recovery rates can vary depending on the type of debt, the collateral, and the financial health of the borrower.

Distressed Securities: Distressed securities are securities issued by a company that is in financial distress or at risk of default. These securities may include bonds, loans, or other debt instruments that are trading at a discount due to the company's financial situation.

Event-Driven Investing: Event-driven investing is an investment strategy that focuses on profiting from specific events or situations that can impact the value of a security. Distressed debt investing is often considered a form of event-driven investing.

Exit Strategy: An exit strategy is a plan for how an investor will sell or liquidate their investment to realize a profit. In the context of distressed debt markets, investors may have various exit strategies, such as restructuring, liquidation, or selling the debt to another investor.

Distressed Real Estate: Distressed real estate refers to properties that are in financial distress, often due to foreclosure or bankruptcy. Investors in distressed real estate may seek to purchase these properties at a discount and either renovate and sell them or hold them for rental income.

Chapter 15: Chapter 15 bankruptcy is a chapter of the bankruptcy code that deals with cross-border insolvency cases. This chapter allows foreign companies to seek relief in the U.S. bankruptcy courts and provides a framework for cooperation between different jurisdictions.

Debtor: A debtor is an individual or company that owes money to a creditor. In the context of distressed debt markets, the debtor may be in financial distress and seeking relief from its debts through restructuring, reorganization, or bankruptcy.

Distressed Loan: A distressed loan is a loan that is in default or at risk of default due to the financial distress of the borrower. Distressed loans may be sold at a discount to their face value to investors looking to profit from restructuring or liquidation.

Distressed Situations: Distressed situations refer to companies or assets that are in financial distress and may be facing bankruptcy or liquidation. Investors in distressed situations may seek to profit from the mispricing of distressed assets or the restructuring of the company's debts.

Turnaround: A turnaround is the process of improving the financial performance of a company that is in distress or underperforming. Turnaround efforts may involve restructuring debt, cutting costs, or implementing new strategies to return the company to profitability.

Distressed Debt Trading: Distressed debt trading refers to the buying and selling of debt of companies that are in financial distress. Distressed debt traders may purchase debt at a discount and sell it at a higher price if the company successfully restructures its debts.

Bankruptcy Code: The Bankruptcy Code is a federal law that governs bankruptcy proceedings in the United States. The Bankruptcy Code provides a framework for individuals and companies to seek relief from their debts and reorganize their finances.

Debtor-Creditor Relationship: The debtor-creditor relationship is the legal relationship between a borrower (debtor) and a lender (creditor) where the debtor owes money to the creditor. This relationship is governed by the terms of the loan agreement and applicable laws.

Distressed Equity: Distressed equity refers to the equity (ownership) interests of a company that is in financial distress. Distressed equity may be purchased at a discount by investors looking to gain control of the company through its equity.

Distressed Bond: A distressed bond is a bond issued by a company that is in financial distress or at risk of default. Distressed bonds may be trading at a significant discount due to concerns about the company's ability to repay its bondholders.

Secured Debt: Secured debt is debt that is backed by collateral, such as real estate or equipment. In the event of default, the lender can seize the collateral to recover its investment, making secured debt less risky than unsecured debt.

Unsecured Debt: Unsecured debt is debt that is not backed by collateral, making it riskier for lenders. In the event of default, unsecured debt holders are only entitled to be repaid after secured debt holders have been satisfied.

Distressed Restructuring: Distressed restructuring refers to the process of renegotiating the terms of a company's debt in order to make it more sustainable. Distressed restructuring may involve changing the interest rate, maturity date, or repayment schedule of the debt.

Bankruptcy Court: Bankruptcy court is a specialized court that handles bankruptcy cases and insolvency proceedings. Bankruptcy courts have the authority to oversee the restructuring or liquidation of a company's debts and assets.

Debt-for-Equity Swap: A debt-for-equity swap is a transaction where a company offers its creditors equity in the company in exchange for canceling or reducing their debt. Debt-for-equity swaps are often used in distressed situations to improve the company's capital structure.

Distressed Investment: A distressed investment is an investment in a company or asset that is in financial distress. Distressed investments may involve buying debt at a discount, purchasing distressed assets, or investing in companies undergoing restructuring.

Financial Distress: Financial distress occurs when a company is unable to meet its financial obligations, such as paying its debts or operating expenses. Companies in financial distress may seek relief through restructuring, reorganization, or bankruptcy.

Distressed Credit: Distressed credit refers to credit that is extended to a borrower who is in financial distress or at risk of default. Lenders of distressed credit may charge higher interest rates or require additional collateral to offset the higher risk.

Distressed Investment Fund: A distressed investment fund is a type of investment fund that focuses on investing in distressed companies or assets. These funds may specialize in distressed debt, distressed equity, or distressed real estate investments.

Distressed Valuation: Distressed valuation is the process of determining the value of a company or asset that is in financial distress. Distressed valuation may involve assessing the company's cash flow, assets, liabilities, and potential for recovery.

Distressed Debt Analyst: A distressed debt analyst is a financial professional who specializes in analyzing distressed debt investments. These analysts may assess the creditworthiness of distressed companies, evaluate recovery prospects, and recommend investment strategies.

Debt Restructuring: Debt restructuring is the process of renegotiating the terms of a company's debt in order to make it more manageable. Debt restructuring may involve extending the maturity date, reducing the interest rate, or converting debt to equity.

Loan-to-Own Investor: A loan-to-own investor is an investor who uses the loan-to-own strategy to gain control of a company through its debt. These investors may buy up a company's debt at a discount with the goal of converting it into equity and taking over the company.

Distressed Debt Exchange: A distressed debt exchange is a transaction where a company offers its creditors new debt or equity in exchange for their existing debt at a discount. Distressed debt exchanges are often used to improve the company's financial position and avoid bankruptcy.

Distressed Debt Specialist: A distressed debt specialist is a financial professional who specializes in investing in distressed debt or advising clients on distressed debt investments. These specialists may have expertise in restructuring, bankruptcy law, or distressed asset valuation.

Capital Structure: The capital structure of a company refers to the mix of debt and equity that it uses to finance its operations. A company's capital structure can impact its financial health, risk profile, and ability to raise capital.

Distressed Debt Opportunity: A distressed debt opportunity is an investment opportunity in a company or asset that is in financial distress. These opportunities may arise from mispricings in the market, restructuring events, or distress in the broader economy.

Distressed Debt Research: Distressed debt research involves analyzing the creditworthiness, financial health, and recovery prospects of companies in financial distress. Distressed debt researchers may assess default risk, recovery rates, and potential returns on investment.

Distressed Debt Investor Conference: A distressed debt investor conference is a gathering of investors, analysts, and industry professionals who specialize in distressed debt investing. These conferences may provide networking opportunities, educational sessions, and insights into the distressed debt markets.

Distressed Debt Market Outlook: A distressed debt market outlook is an assessment of the current and future conditions of the distressed debt markets. Market outlooks may include analysis of default rates, recovery rates, investor sentiment, and economic factors affecting distressed debt investments.

Distressed Debt Trading Strategies: Distressed debt trading strategies are investment strategies used by investors to profit from buying and selling distressed debt. These strategies may include long-term investing, trading on market inefficiencies, or using leverage to enhance returns.

Distressed Debt Portfolio: A distressed debt portfolio is a collection of distressed debt investments held by an investor or investment fund. Distressed debt portfolios may include a mix of senior debt, subordinated debt, equity stakes, and other distressed assets.

Distressed Debt Risk Management: Distressed debt risk management involves identifying, assessing, and mitigating the risks associated with investing in distressed debt. Risk management strategies may include diversification, due diligence, hedging, and monitoring credit conditions.

Distressed Debt Trading Platform: A distressed debt trading platform is an online marketplace where investors can buy and sell distressed debt securities. These platforms may provide access to a wide range of distressed debt investments, trading tools, and market data.

Distressed Debt Legal Issues: Distressed debt legal issues are legal challenges that may arise in the course of investing in or restructuring distressed debt. These issues may include bankruptcy proceedings, creditor rights, contractual disputes, and regulatory compliance.

Distressed Debt Market Liquidity: Distressed debt market liquidity refers to the ease with which distressed debt securities can be bought or sold in the market. Market liquidity can impact pricing, trading volume, and the ability to exit or enter investments in distressed debt.

Distressed Debt Market Trends: Distressed debt market trends are patterns or developments that are shaping the distressed debt markets. Market trends may include changes in default rates, recovery rates, investor preferences, regulatory reforms, or economic conditions.

Distressed Debt Market Participants: Distressed debt market participants are individuals or institutions that are active in the distressed debt markets. These participants may include distressed debt investors, hedge funds, private equity firms, investment banks, legal advisors, and restructuring professionals.

Distressed Debt Market Dynamics: Distressed debt market dynamics are the forces that drive supply and demand in the distressed debt markets. Market dynamics may be influenced by macroeconomic factors, industry trends, investor sentiment, regulatory changes, and other external factors.

Distressed Debt Market Challenges: Distressed debt market challenges are obstacles or difficulties that investors may face when investing in distressed debt. These challenges may include market volatility, regulatory uncertainties, legal disputes, counterparty risks, and macroeconomic shocks.

Distressed Debt Market Opportunities: Distressed debt market opportunities are favorable conditions or events that can benefit investors in the distressed debt markets. Opportunities may arise from market inefficiencies, mispricings, restructuring events, economic recoveries, or industry disruptions.

Distressed Debt Market Regulations: Distressed debt market regulations are rules and laws that govern the trading, investing, and restructuring of distressed debt securities. These regulations may include bankruptcy laws, securities laws, tax laws, and compliance requirements for market participants.

Distressed Debt Market Developments: Distressed debt market developments are changes or innovations that are shaping the distressed debt markets. Developments may include new investment strategies, technology tools, market platforms, industry practices, or regulatory reforms.

Distressed Debt Market Analysis: Distressed debt market analysis involves evaluating the current conditions, trends, and opportunities in the distressed debt markets. Market analysis may include assessing default rates, recovery rates, credit spreads, investor sentiment, and economic indicators.

Distressed Debt Market Strategies: Distressed debt market strategies are investment approaches used by investors to profit from opportunities in the distressed debt markets. Strategies may include distressed debt investing, distressed asset trading, distressed real estate acquisitions, or distressed loan portfolios.

Distressed Debt Market Performance: Distressed debt market performance refers to the returns, risks, and volatility of investments in the distressed debt markets. Market performance may be measured by benchmark indices, peer comparisons, risk-adjusted returns, and other metrics.

Distressed Debt Market Outlook 2022: The distressed debt market outlook for 2022 is an assessment of the current and future conditions of the distressed debt markets in the year 2022. The outlook may include forecasts, trends, risks, and opportunities for investors in distressed debt.

Distressed Debt Market Forecast: A distressed debt market forecast is a prediction of future conditions, trends, and opportunities in the distressed

Distressed Debt Markets: Distressed debt refers to debt instruments issued by a company that is in financial distress or has already defaulted on its obligations. These debt securities are typically sold at a significant discount to their face value due to the increased risk associated with the issuer's financial situation. Distressed debt markets are where these securities are bought and sold, often by investors looking to profit from the potential turnaround of distressed companies.

Restructuring: Restructuring is the process of reorganizing a company's financial and operational structure in order to improve its financial stability and viability. This can involve renegotiating debt agreements, selling off assets, or making other strategic changes to the business in order to address financial distress and avoid bankruptcy.

Reorganization: Reorganization is a broader term that encompasses not only financial restructuring but also operational changes within a company. It may involve redefining the company's business model, organizational structure, or market focus in addition to addressing financial issues.

Debt-for-Equity Swap: A debt-for-equity swap is a transaction in which a company's creditors exchange their debt claims for equity ownership in the company. This can help reduce the company's debt burden and provide a fresh injection of capital, but it also dilutes existing shareholders' ownership.

Chapter 11: Chapter 11 is a section of the United States Bankruptcy Code that governs the reorganization of financially distressed companies. It allows companies to continue operating while they develop a plan to restructure their debts and operations. Chapter 11 provides companies with protection from creditors' claims while they work to reorganize, giving them a chance to emerge from bankruptcy as a stronger, more viable entity.

Distressed Investor: A distressed investor is an individual or entity that specializes in investing in distressed debt securities or distressed companies. These investors often have a high tolerance for risk and are willing to take on the challenges associated with distressed investments in exchange for the potential for high returns.

Loan-to-Own Strategy: A loan-to-own strategy is an investment approach in which an investor acquires a distressed company's debt with the intention of converting it into equity ownership through a bankruptcy or restructuring process. By acquiring the debt at a discount, the investor aims to gain control of the company and potentially profit from its recovery.

Distressed Exchange: A distressed exchange occurs when a company offers its creditors the opportunity to exchange their existing debt securities for new debt or equity securities at a discounted rate. This can help the company reduce its debt burden and improve its financial position, but it may also result in losses for creditors who agree to the exchange.

Workout: A workout is a negotiated agreement between a company and its creditors to restructure the company's debt outside of bankruptcy proceedings. Workouts are often used as an alternative to bankruptcy when both parties believe that a consensual agreement can be reached to address the company's financial difficulties.

Distressed Asset: A distressed asset is an asset held by a company that is in financial distress or facing bankruptcy. These assets may be sold at a discount in order to raise cash or restructure the company's operations.

Bankruptcy: Bankruptcy is a legal process in which a company or individual who cannot meet their financial obligations seeks protection from creditors in order to reorganize their debts or liquidate their assets. Bankruptcy can be filed under various chapters of the bankruptcy code, such as Chapter 7 for liquidation or Chapter 11 for reorganization.

Special Situations: Special situations refer to unique investment opportunities that arise from specific events or circumstances, such as distress, reorganization, or restructuring. Special situations investors look for opportunities to profit from these events by taking advantage of mispricings in the market or undervalued assets.

Senior Debt: Senior debt is debt that has priority over other debt obligations in the event of a company's liquidation or bankruptcy. Senior debt holders are typically the first to be repaid from the company's assets and cash flow, making it a lower-risk investment compared to subordinated or junior debt.

Subordinated Debt: Subordinated debt is debt that ranks below senior debt in the capital structure of a company. In the event of bankruptcy or liquidation, subordinated debt holders are only repaid after senior debt holders have been satisfied. This makes subordinated debt riskier but potentially offers higher returns to investors.

Distressed Security: A distressed security is a financial instrument, such as a bond or loan, issued by a company that is in financial distress or facing bankruptcy. These securities are often traded at a significant discount to their face value due to the heightened risk associated with the issuer's financial situation.

Default: Default occurs when a borrower fails to meet its debt obligations, such as making interest or principal payments on a loan. Default can lead to a variety of consequences, including legal action by creditors, downgrades in credit ratings, and potential bankruptcy proceedings.

Liquidation: Liquidation is the process of selling off a company's assets in order to repay its creditors and wind down its operations. This typically occurs in bankruptcy proceedings when a company is unable to restructure its debts or continue operating as a going concern.

Financial Distress: Financial distress refers to a company's inability to meet its financial obligations, such as paying debts, servicing loans, or generating sufficient cash flow to cover expenses. Financial distress can lead to bankruptcy, reorganization, or other forms of restructuring in order to address the company's financial challenges.

Equity Holder: An equity holder is an individual or entity that owns shares or equity ownership in a company. Equity holders are the last in line to be repaid in the event of bankruptcy or liquidation, making their investments riskier but potentially offering higher returns compared to debt investments.

Turnaround: Turnaround refers to the process of revitalizing a distressed company and returning it to profitability. Turnaround efforts may involve strategic changes, cost-cutting measures, operational improvements, and other initiatives to address the root causes of the company's financial distress.

Distressed Valuation: Distressed valuation is the process of determining the value of a distressed company or its assets in a distressed situation. This involves assessing the company's financial condition, market position, future cash flows, and other factors to determine a fair value for the company or its securities.

Debtor-in-Possession (DIP) Financing: Debtor-in-possession financing is a type of financing provided to a company that is in bankruptcy proceedings and is allowed to continue operating as a debtor-in-possession. This financing is typically secured by the company's assets and is used to fund the company's operations during the restructuring process.

Distressed Loan: A distressed loan is a loan made to a company that is in financial distress or facing bankruptcy. These loans are often sold at a discount by the original lender to distressed debt investors looking to profit from the potential turnaround of the borrower.

Distressed Investor: A distressed investor is an individual or entity that specializes in investing in distressed debt securities or distressed companies. These investors often have a high tolerance for risk and are willing to take on the challenges associated with distressed investments in exchange for the potential for high returns.

Loan-to-Own Strategy: A loan-to-own strategy is an investment approach in which an investor acquires a distressed company's debt with the intention of converting it into equity ownership through a bankruptcy or restructuring process. By acquiring the debt at a discount, the investor aims to gain control of the company and potentially profit from its recovery.

Distressed Exchange: A distressed exchange occurs when a company offers its creditors the opportunity to exchange their existing debt securities for new debt or equity securities at a discounted rate. This can help the company reduce its debt burden and improve its financial position, but it may also result in losses for creditors who agree to the exchange.

Workout: A workout is a negotiated agreement between a company and its creditors to restructure the company's debt outside of bankruptcy proceedings. Workouts are often used as an alternative to bankruptcy when both parties believe that a consensual agreement can be reached to address the company's financial difficulties.

Distressed Asset: A distressed asset is an asset held by a company that is in financial distress or facing bankruptcy. These assets may be sold at a discount in order to raise cash or restructure the company's operations.

Bankruptcy: Bankruptcy is a legal process in which a company or individual who cannot meet their financial obligations seeks protection from creditors in order to reorganize their debts or liquidate their assets. Bankruptcy can be filed under various chapters of the bankruptcy code, such as Chapter 7 for liquidation or Chapter 11 for reorganization.

Special Situations: Special situations refer to unique investment opportunities that arise from specific events or circumstances, such as distress, reorganization, or restructuring. Special situations investors look for opportunities to profit from these events by taking advantage of mispricings in the market or undervalued assets.

Senior Debt: Senior debt is debt that has priority over other debt obligations in the event of a company's liquidation or bankruptcy. Senior debt holders are typically the first to be repaid from the company's assets and cash flow, making it a lower-risk investment compared to subordinated or junior debt.

Subordinated Debt: Subordinated debt is debt that ranks below senior debt in the capital structure of a company. In the event of bankruptcy or liquidation, subordinated debt holders are only repaid after senior debt holders have been satisfied. This makes subordinated debt riskier but potentially offers higher returns to investors.

Distressed Security: A distressed security is a financial instrument, such as a bond or loan, issued by a company that is in financial distress or facing bankruptcy. These securities are often traded at a significant discount to their face value due to the heightened risk associated with the issuer's financial situation.

Default: Default occurs when a borrower fails to meet its debt obligations, such as making interest or principal payments on a loan. Default can lead to a variety of consequences, including legal action by creditors, downgrades in credit ratings, and potential bankruptcy proceedings.

Liquidation: Liquidation is the process of selling off a company's assets in order to repay its creditors and wind down its operations. This typically occurs in bankruptcy proceedings when a company is unable to restructure its debts or continue operating as a going concern.

Financial Distress: Financial distress refers to a company's inability to meet its financial obligations, such as paying debts, servicing loans, or generating sufficient cash flow to cover expenses. Financial distress can lead to bankruptcy, reorganization, or other forms of restructuring in order to address the company's financial challenges.

Equity Holder: An equity holder is an individual or entity that owns shares or equity ownership in a company. Equity holders are the last in line to be repaid in the event of bankruptcy or liquidation, making their investments riskier but potentially offering higher returns compared to debt investments.

Turnaround: Turnaround refers to the process of revitalizing a distressed company and returning it to profitability. Turnaround efforts may involve strategic changes, cost-cutting measures, operational improvements, and other initiatives to address the root causes of the company's financial distress.

Distressed Valuation: Distressed valuation is the process of determining the value of a distressed company or its assets in a distressed situation. This involves assessing the company's financial condition, market position, future cash flows, and other factors to determine a fair value for the company or its securities.

Debtor-in-Possession (DIP) Financing: Debtor-in-possession financing is a type of financing provided to a company that is in bankruptcy proceedings and is allowed to continue operating as a debtor-in-possession. This financing is typically secured by the company's assets and is used to fund the company's operations during the restructuring process.

Distressed Loan: A distressed loan is a loan made to a company that is in financial distress or facing bankruptcy. These loans are often sold at a discount by the original lender to distressed debt investors looking to profit from the potential turnaround of the borrower.