Distressed Investing Opportunities Plentiful

Aurora Capital Group, GSC Group and Saybrook Capital have completed their Chapter 11 restructuring of drywall equipment manufacturer Ames Taping Tool Systems. The firms were all existing investors in the company when it filed for bankruptcy in December as a result of the downturn in commercial and residential construction. Through the restructuring, the company has recapitalized its balance sheet and received $20 million in new capital.

Private equity firms have invested in 86 bankrupt companies over the past three years, according to the PitchBook Platform. 17 of these have been during this quarter alone, more than during the first and second quarters of last year combined. In the past two quarters, there has been a total of 32 investmetns in bankrupt companies. This data shows the continued interest of PE investors in distressed companies and the delayed effect the credit crisis and recession have had on companies. Distressed investing opportunities will probably continue to be above normal as companies struggle with maturing debt loads and poor balance sheets.