The Distressed Debt Report - March 11, 2008

2nd Liens Out of Money, Hedge Funds Flee Distressed Market

With the credit market in the early stages of a downturn expected to last into 2009, distressed investors are gaining some insight on the influence that newer debt market players are likely to have on corporate workouts. Full Story

D.B. Zwirn’s Liquidations Promise Broad Range of Pickings

Early one morning in late February, 70 distressed real estate buyers showed up at the Washoe County courthouse in Reno, Nev., to consider bidding on Copper Canyon, a failed residential and commercial development slated for 1,300 acres. Developer SunCal Cos. of Irvine, Calif., had defaulted on a $35 million loan to finance the ground's purchase as well as infrastructure. The auctioneer asked for a price north of $37 million, but no offers materialized. The land reverted to SunCal's lender, D.B. Zwirn Special Opportunities Fund L.P. in New York. It just happens to be one of two funds – Special Opportunities Fund Ltd. is the other – that investment manager D.B. Zwirn & Co. intends to liquidate in the coming months. Full Story

Chrysler Tries to Seize Plastech Factory Equipment

In an ominous sign for debt providers to the U.S. automotive industry, recent events in Plastech Engineered Products' bankruptcy may indicate that the Big Three automakers are less willing than in the past to offer financial assistance to their suppliers. Full Story

• Pacificor Loses Controlling Position in Dura Reorganization
• Even ABL Market Has Shut Off, Investors Say
• Genesco, Finish Line Terminate Merger
• DLA Piper Hires Former Head of Lord Bissell Bankruptcy Practice
• Triple Net Challenging Sirva's DIP Loan
• SageCrest Reportedly Fails to Report Year-End Results
• Trading Platform Opens for Auction-Rate Securities
• Regional Banks Fared Better than National Banks in Q4
• Some Middle Market Executives Expect More M&A