Distressed debt

When a company's debt becomes distressed

Distressed debt is the condition of debt when the issuer is unable to meet the terms of repayment of the borrowing, either on time, or at all. The result of debt becoming distressed is that the value of the debt declines.

Consequences of distress

When a company's debt becomes distressed, the company becomes vulnerable to indirect takeover, through a distressed debt investor acquiring the debt and utilising the rights granted to debtholders to acquire voting rights or board control, when the debt is in default.

Danziger Capital Partners LLP advises United Kingdom companies on dealing with situations of distressed debt, and avoiding loss of control to distressed debt investors.