Discussion at Democratic Undergound.Bankruptcy advisers are hiring extra staff amid fears that an end to the global credit boom could spark a surge in business failures in the US and Europe.
Unusually loose lending conditions have encouraged record borrowing by speculative-grade companies, with leveraged buy-outs and debt refinancing on both sides of the Atlantic generating more than $100bn of deals in the past eight months.
But last week's fall in the price of US Treasury bonds, coinciding with signs that bankers are struggling to complete riskier corporate bond issues, has added to a sense of nervousness in some quarters.
Although corporate default rates remain low, some fear the legacy of recent private equity buy-outs and hedge fund investments in distressed debt will be a swath of over-leveraged companies ill-equipped to survive in less benign conditions.
Financial Times article
Speaking of bankruptcy....
Bernard J. Ebbers, the former chief executive of WorldCom, was found guilty today on all nine counts of orchestrating a record $11 billion fraud that bankrupted his company.
Mr. Ebbers, 63, was convicted of securities fraud, conspiracy and seven counts of filing false reports with regulators. He now faces up to life in prison, with the convictions collectively carrying a maximum penalty of 85 years in prison.
NY Times article
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