Michelle M. Harner
The third article is an excellent piece by Professor Michelle M.
Harner. In Trends in Distressed Debt Investing: An
Empirical Study of Investors' Objectives, empirical data on
investment patterns and techniques of distressed debt investors are
explored and the role of these investors in chapter 11 cases is
discussed. The author concludes that activist distressed debt
investors are well-financed and can be reasonably successful in
their efforts to effectuate change in or acquire troubled
companies. Moreover, the author finds that, when left
unimpeded, creditor control by distressed debt investors can bring
about creditor self-dealing and negatively impact the debtor as
well as other interested parties. Finally, after describing
the current chapter 11 system, the author advocates for the need to
develop a more estate-focused reorganization process.