A number of years ago, when I knew nothing about distressed, my portfolio manager sat me down and said, "Our friends at XYZ hedge fund [name redacted] are telling me these Enron bonds are interesting - start working through it." Over the next 6 months I cut my teeth (hard) on figuring out how much bond holders would receive and what return that translated to. It was one of the best exercises that I've ever been put through as an analyst.
- As in most cases with financial assets as collateral for creditors, there is a perception that there has been a sense of conservatism and that, over time, these assets throw off cash that increases recoveries to creditors
- The fact that no one really knows the recovery on foreign inter company receivables. We do know that the recovery of inter company receivables from foreign affiliates, at less than 10% is far below similar (domestic for instance) recoveries contemplated in the disclosure statement - It's also a HUGE number where a 1% bump means $500M more recovered for LBHI
- Litigation awards that could go any which way