The Vulture Investors

Rosenberg, a financial journalist, wrote the first popular account of the distressed debt investors who bought the bonds of failing companies during and after the leveraged buyout period. Her subjects include Michael Price, Martin Whitman, Wilbur Ross, Leon Black and others who built businesses buying claims on bankrupt estates.

The book works through several bankruptcies in detail, including the Texaco and Pennzoil litigation, Revco, Public Service Company of New Hampshire, and the aftermath of the Drexel collapse. What she shows is the process: buying claims at large discounts from original holders who cannot or will not hold defaulted paper, organising creditor committees, negotiating the plan of reorganisation, and converting debt into the equity of the reorganised company. She is clear that the returns come from the combination of forced selling by institutional holders whose mandates prohibit defaulted securities, the analytical work of valuing a claim through an uncertain legal process, and the ability to influence the outcome through committee position.

The reference has not independently verified the specific transaction figures reported. The book is from 1992 and the market has changed substantially since: distressed investing became an institutional asset class, the participants are far larger, and the tactics have evolved to include loan-to-own strategies and liability management exercises the book does not cover. Its value is as a readable introduction to the mechanics and to the personalities who established the field.