Unsecured creditors, meanwhile, get screwed for $192 million…
Bankruptcy is a helluva biz. You can wipe away years of bad decision with a snap of the fingers and leave all those poor schlubs that kept the biz alive for all those years with their textiles, their services, their artisan skills, holding out their hands, begging for a few pennies in the dollar.
In the case of the bankrupt surf icon Quiksilver Inc, which has just won court approval for $175 million in bankruptcy financing ($115 million from the largest distressed-debt investor in the world, Oaktree Capital, the rest from the Bank of America), unsecured creditors who are owed more than $200 million would get to split seven-and-a-half mill.
What’s that work out to? Three and three-quarter cents out of every dollar.
Let’s do a little maths. Say you were owed a hundred grand. You get a little under four gees back.
Nice.
Quiksilver Inc, meanwhile, will exit court protection with half-a-billion dollars less debt.
Not that the circling by distressed debt investors is over, even if Oaktree is the front-runner.
Best part of the Quik crisis is that a huge crew of me SoCal mates got put on the dole and have all winter to chase waves up and down the coast. Thanks Oaktree, the posse shall roll deep this season!!!
Mariano, if your pasta is as good as your comments you should open a brothel… err, restaurant.
What about a marinara bathhouse? Come for the friendship, stay for the sauce.
Oaktree isn’t a hedge fund. A hedge fund is a kind of investment partnership that engages in large scale speculative share trading both with and against the sharemarket. Oaktree makes direct investments in struggling businesses in order to turn them around at a bargain price and hold the investment long enough to see as big a gain as possible. They’re like a small but scary bank.
…yeah, lazy writing. I prefer distressed-debt investor, when I think about it…
That doesn’t sound like a bank – that sounds like a private equity firm.
So… Dane Finger still has a job?
Yeah…for as long as he’s willing to accept about half what he’s been used to.