High yield bond fund Proventus Capital Partners (PCP) has invested in an underwater bonds issued Preem, a major oil refinery. As maturity approaches, at the height of the financial crisis, Preem is unlikely to be able to refinance. Meanwhile, Preem has a complex multi-capital structure and senior secured bank loans and junior bonds. PCP has to decide whether to push for bankruptcy before the Court, or to insist on-court renegotiations. The fact is, a tool to study the difference between the problems of liquidity and solvency problems, weighing against the bankruptcy-court restructuring, and deal with the negotiations between the creditors. "Hide
by Bo Becker, Annelena Lobb, Aldo Sesia Source: Harvard Business School 19 pages. Publication Date: August 22, 2012. Prod. #: 213008-PDF-ENG
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