Can anyone help me explain these private equity transactions and how they work?

Distressed Funding

Sometimes called by the pejorative name “vulture financing,” distressed funding means investing in a troubled company that is not performing well. With this type of funding, investors hope to turn the company around by making key changes to operations and management, or by selling certain assets, which can range from intellectual property to real estate. Investors often target companies that have filed for Chapter 11 bankruptcy in the United States when engaging in this type of private equity transaction. Distressed funding has been a fairly popular approach to private equity since the financial crisis of 2008.

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