Why Bankruptcy Court Is Latest Battleground for Traders at Distressed Investing Conference 2010

Sept. 7, 2010 - PRLog -- "The bankruptcy process was created decades ago as a way to give ailing businesses a chance to heal and creditors a shot at repayment. Hedge funds and other big investors have transformed it into something else: a money-making venue where, after buying up distressed companies' debt at a deep discount, they can ply their sophisticated trading techniques in quest of profits." That is how The Wall Street Journal's Mike Spector and Tom McGinty describe the bankruptcy system, which hundreds of executives, professionals and investors who will join Golden Networking's Distressed Investing Experts Forum 2010, with sometimes conflicting goals, have established as their battleground, as they try to satisfy their constituencies. Distressed Investing Experts Forum 2010, "Analyzing and Valuing Distressed Companies, Securities and Real Estate" (http://www.DistressedInvestingExpertsForum.com), will be held on September 21st, 2010, at the Consulate General of the Republic of Poland in New York City.

Messrs. Spector and McGinty 's article continues: "This is perfectly legal, but is raising questions of transparency and fairness as the "distressed debt" investors joust with bankruptcy judges and others over what they must disclose as they trade in and out of a company's debt, even while trying to influence its reorganization. To some in the bankruptcy bar, the investors' tactics are an affront to a tradition meant to nurse companies back to health and save jobs. At worst, say critics, the involvement of distressed-debt investors can turn a bankruptcy case into an insiders' game, putting at a disadvantage other creditors and even the judge who is trying to guide an outcome that best serves the company and the wide array of those it owes. "Now what happens is you have very sophisticated people whose primary objective is material gain," says Harvey Miller, a veteran bankruptcy lawyer at Weil, Gotshal & Manges. "You've changed [bankruptcy] from at least the semblance of a rehabilitative approach to a casino approach of 'how do I make more money?'" Distressed-debt investors say they play an important role in the bankruptcy process by buying claims from creditors who can't wait years for a resolution, and sometimes by providing loans that beleaguered companies need to keep operating. They add that they honor all of the bankruptcy process's requirements, including bans on trading in company debt during periods when they have access to nonpublic knowledge."

Finally, Messrs. Spector and McGinty conclude with the point of view of the companies going through bankruptcy: "Jonathan Henes, a Kirkland & Ellis lawyer who represented ION, said that while there is "nothing wrong" with hedge funds placing bets on troubled companies' debt in pursuit of profits, that isn't the goal of the bankruptcy code. It "was established for companies to rehabilitate their operations, fix their capital structures, preserve jobs and treat creditors fairly. Bankruptcy isn't designed to make sure that investors make money," Mr. Henes said."

Distressed Investing Experts Forum 2010 is produced by GoldenNetworking.net (http://www.goldennetworking.net), the premier networking community for business executives, entrepreneurs, investors and diplomats, founded by former McKinsey consultant and Columbia Business School MBA Edgar Perez. Upcoming Golden Networking's Forums and Business Receptions include:

•   High-Frequency Trading Happy Hour, (http://www.HFTHappyHour.com), September 14th, New York City
•   Distressed Investing Experts Forum 2010, "Analyzing and Valuing Distressed Companies, Securities and Real Estate" (http://www.DistressedInvestingExpertsForum.com), September 21st, New York City
•   High-Frequency Trading Experts Workshop 2010, "Practical Implementation of High-Frequency Trading Strategies" (http://www.HFTExpertsWorkshop.com), October 4 & 5, London, October 7 & 8, New York, October 25 & 26, Dubai, and October 28 & 29, Hong Kong
•   2nd China Leaders Forum, "Challenges and Opportunities for China's Economic Juggernaut" (http://www.ChinaLeadersForum.com), October 6th, New York City
•   Latin America Leaders Forum 2010, "Unlikely Oasis of Growth amid the Global Economic Crisis?" (http://www.LatinAmericaLeadersForum.com), October 21st, New York City
•   1st Finance Leaders Forum, "How the New Financial Legislation Will Impact You and Your Business" (http://www.FinanceLeadersForum.com), November 4th, New York City
•   2nd Banking Leaders Forum, "Private Banking on the Brink of Transformational Change" (http://www.BankingLeadersForum.com), November 18th, New York City
•   Global Energy Leaders Forum 2010, "Proposals and Solutions for Today's Global Energy Challenges" (http://www.GlobalEnergyLeadersForum.com), December 2nd, New York City
•   2nd Private Equity Leaders Forum, "Setting the Stage for Radical Transformation in 2011 and Beyond" (http://www.PrivateEquityLeadersForum.com), December 9th, New York City

Golden Networking has compiled the insights of top experts and industry practitioners and produced DVD Video Packages for its Leaders and Experts Forums, including:

•   Derivatives Leaders Forum 2010 DVD Video Package, "Strategies for Increasing Profits under an Evolving Regulatory Framework", http://www.DerivativesLeadersForum.com
•   High-Frequency Trading Leaders Forum 2010 DVD Video Package, "Innovating and Profiting from High-Frequency Trading in 2010 and Beyond", http://www.HFTLeadersForum.com
•   Hedge Funds Leaders Forum 2010 DVD Video Package, "Generating Alpha in Challenging Times", http://www.HedgeFundsLeadersForum.com
•   High-Frequency Trading Experts Forum 2010 DVD Video Package, "Starting and Running a High-Frequency Trading Operation", http://www.HFTExpertsForum.com
•   Distressed Investing Leaders Forum 2010 DVD Video Package, "Extraordinary Opportunities Investors Cannot Afford to Pass", http://www.DistressedInvestingLeadersForum.com
•   China Leaders Forum 2009 DVD Video Package, "Addressing the Challenges Posed by the Present Wave of Chinese Globalization", http://www.ChinaLeadersForum.com
•   Distressed Investing Leaders Forum 2009 DVD Video Package, "The Most Comprehensive Guide for Any Investor in Distressed Assets", http://www.DistressedInvestingLeadersForum.com

Panelists, speakers and sponsors are invited to contact Golden Networking by sending an email to info@goldennetworking.net. Golden Networking has been frequently featured in the press, including recent articles in The Wall Street Journal, "Happy Hour for High-Frequency Trading", The New York Times, "Golden Networking Helps Job Seekers Make Overseas Connections", Los Angeles Times, "Speed-addicted traders dominate today's stock market", Reuters, "Revamp looms as trading experts huddle at SEC" and Columbia Business School's Hermes Alumni Magazine, "10 Under 10".

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