Why Bankruptcy Court is Latest Battleground for Traders at Golden Networking's Distressed Investing Experts Forum 2010

New York, NY, September 11, 2010 --(PR.com)-- "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.

###