The Distressed Debt Report - February 13, 2007

Highland, UBS Fight with Senior Lenders for Control of Health Food Company

The bankruptcy of nutrition-bar maker Nellson Nutraceutical may be a prototypical example of how future reorganizations will play out with the complexities introduced by second lien lenders and more aggressive private equity funds. Full Story

Greenlight Capital Pushes For Punishment at Allied Capital

Greenlight Capital’s courtroom and public relations offensive against business development company Allied Capital Corp. and Allied portfolio company Business Loan Express (BLX) has introduced a whole new meaning to the concept of hedge fund activism. By all accounts, Greenlight is a short seller of Allied Capital stock, unlike other activist hedge funds which typically hold a long position. Full Story

Offering Could Set Stage for Wave of Hedge Fund IPOs

Middle market lender Fortress Investment Group raised $595.3 million last week in the first-ever initial public offering on U.S. markets by a hedge fund manager. The New York-based firm may also have set the stage for more hedge fund IPOs as its shares rose 68% in their first day of trading on the NYSE. Full Story

• CIT to Begin Offering CLOs
• Bush Budget Proposes Lower SBIC Fees
• Black Diamond Closes Fund with $982M
• Key Closes $500M Mezzanine Fund
• Wachovia to Cooperate with Le-Nature’s Subpoena
• Black Diamond, TWC Bid for Control of Bankrupt Ladder Maker
• Foamex Reorganization Makes Lenders Whole
• Former Gordian Exec Joins KPMG

Credit Suisse Arranging $365M for Aerospace Manufacturer

Wachovia Capital Markets and Goldman Sachs Credit Partners were hired to arrange part of $960 million in new credit facilities for local newspaper publisher GateHouse Media in one of the biggest debt financings of recent weeks by a middle market company. Full Story