If corporate bondholders convert their debt into equity as part of a restructuring, they then have the power that equity ownership confers: They could demand new management.
The old shareholders will get the equity in the bad bank. (In any restructuring, bondholders should do better than equity.) And the FDIC minimizes its risk because it guarantees the deposits in the good bank.
Wildern worked on corporate restructuring and private equity for about 10 years after that.
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Banks are also raising their stakes in their most troubled borrowers, via debt-for-equity swaps, in return for tepid restructuring schemes.
Once again Gilinski applied the true and proven formula that had worked so well with BCCI: restructuring Banco de Colombia in private equity fashion and then progressively selling their stake.
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Investors reacted to the news by selling Clearwire shares, apparently fearing that any financial restructuring could include replacing some debt with equity, and diluting current holders.
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Now you can convert, like we do for corporate restructuring, some of that debt into equity if you reduce the face value and then you make the creditor effectively a shareholder in the house by giving them the upside to warrants.
Glenn Hutchins of Silver Lake thinks the tech sector is now in a similar condition to the old economy in America in the early 1980s, which is when private equity first started to have an impact, by restructuring and consolidating many industries.
But private-equity investors that focus on expanding the company rather than restructuring will need to be picky.
By restructuring mortgages so that homeowners have 5% equity in their properties rather than negative equity, Ocwen creates an incentive for homeowners to keep up with a more affordable payment schedule on a reduced principal.
There is still money to be made trading currencies, interest-rate products, equity derivatives (popular when markets are volatile) and corporate restructuring.
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The private-equity firm is leading the charge behind a three-year restructuring plan begun last July to help the firm reduce its inventory as well as introduce new products more quickly.
Although the economy is picking up, the equity market is going to be driven by earnings growth and corporate restructuring, which I don't see happening.
But profits as a percentage of GDP and returns on equity have risen sharply since the crisis, as a result of restructuring and a focus on profitability.
The result, analysts say, of a restructuring and turnaround plan executed after a group of private equity firms took the company private in 2007. (The company was then called OSI Restaurant Partners.) Elizabeth Smith, an Avon Products executive, came in to manage the turnaround attempt.
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The small but influential firm buys the equity or debt of troubled companies and then uses its influence to push for restructuring.
Private-equity firms have long played a central role in shepherding distressed companies through bankruptcy and restructuring, but hedge funds increasingly have taken on that role.
Diminishing equity value across the broadcasting and publishing industries means they will not return without a good deal more dilution and debt restructuring.
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