Contrarian Capital: Identification of Fulcrum Security Proves Critical to Optimizing Profitability
Contrarian Capital:Identification of FulcrumSecurity Proves Critical toOptimizing Profitability
With a proven track record of generating returns,Contrarian Capital directs the seasoned judgment of itsexecutive and management team to deliver strongresults for the firm’s clients. The financial professionalsat Contrarian Capital focus on such high-income areasas real estate, emerging markets, and distressedsecurities.
Fulcrum security represents the highest priority inrelation to secured debt. According to investitureagreement, fulcrum debt always receives first priority forrepayment in the event that a company goes out ofbusiness. In fact, fulcrum debt necessitates theliquidation or transfer of any company assets if acompany proves unable to meet debt serviceobligations.
When investors consider bailing out a distressedcompany to optimize its long-term potential forprofitability, they often purchase the fulcrum debt topromote financial flexibility. By eliminating the owner ofthe debt of absolute priority under the law, investors indistressed securities enhance their control overbusiness ventures, fiscal activities, and operations. Thisallows them to implement new processes, technologies,and expansion plans that enable them to realize thebest possible outcome for corporate growth.