Was diving into this over the weekend, and you'll frequently see MM/LMM firms writing what amounts to a vanilla equity check into their distressed port cos when any rx banker or lawyer would probably tell them not to structure things that way or to wait until post-petition etc.
Anyone know why this happens so frequently? Is it just people in denial about the situation their port co is in?
Are PE firms just concerned about relationships with lenders/other equity on the cap table? Or concerns around subordination/recharacterization - which are pretty hard to lose?
This is for companies doing ~$50m - $250m btw. Haven't looked at much larger than that. Figure there must be some logic?
I read about BH Cosmetics in Petition today too
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