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Silver Linings from Ireland’s Financial Clouds

02 December 2013

When speaking of “distressed assets” what is generally being dealt with is a “distressed loan”. An asset is worth what it realises in the marketplace. If the loans and the associated security instruments are sold, as distinct from the asset itself, then the purchaser gets recourse to the underlying asset through enforcing the loan and the underlying security. The borrower may be unable to repay the loan and therefore the loan is distressed. If an asset is sold for less than it was bought for, then it is not in itself distressed but overvalued in the context of funding that has been put in place with respect to it.

1. Sales

The disposal of assets, by lenders directly, by receivers at the instigation of lenders and by borrowers has manifested itself in a number of ways including through:

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