In the past, we have discussed Rule 2019 in the bankruptcy of Accuride. To recap, Rule 2019 is summarized as thus:
"Rule 2019(a) requires that unofficial committees or ad hoc groups disclose, inter alia, (1) the nature and amount of their claims or interests; (2) the date of acquisitions of their claims or interests acquired in the year prior to the filing of the bankruptcy case; (3) the amount paid; and (4) any subsequent sales of claims or interests."
- The name and address of each forming entities and for who the group is acting on behalf
- Name and amount of claims against / equity ownership in the debtor
- The date (by quarter and year) of purchase (unless acquired a year before Chapter 11 petition)
- Total Senior Unsecured Claims held as of April 13, 2011 = $4,006,220,219. This number nets buys and sells throughout the transaction history.
- Total Purchased Claims ~ $7,006,727,733. Sold claims ~ $3,000,507,555
- Capital Spent for Purchases ~ $928,475,080. Average Price Paid ~ 13.2 cents on the dollar
- Capital Raised on Sales ~ $637,112,472. Average Sale Price ~ 21.2 cents on the dollar
- Current Position = Claims * Market Price = $4,006,220,219 * 26 cents on the dollar ~ $1,041,617,257
- Capital Raised (see above) = $637,112,472
- Capital Spent (see above) = $928,475,080
- Current Position + Proceeds from Sales ~ $1,678,729,729
Distressed Debt Investing for the win? I think so. It is going to be interesting to see what, if any, effect this new ruling has on ad hoc and unofficially credit committees. One thing I am interested to hear is whether this will apply to steering committees in bank facilities.