Why Creditors Choose To On-sell Their Claims
There are many reasons why creditors choose to on-sell their claims against bankrupt or insolvent companies:
- Their company immediately receives cash for something they had written off completely.
- The process is simple and removes complications that arise from owning a claim such as filing ballots, elections or other paperwork relating to the claim.
- They avoid the risks and costs associated with the bankruptcy process.
- They avoid potentially having to account for the claim on an ongoing basis.
The process of a company liquidation can often run on for many years. Over time, companies evolve and change and, in the process, important documentation safeguarding the validity of the claim is often lost or destroyed by accident. By selling their claim now, the creditor realises value and removes risk.
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At Ampleton Group, we actively purchase the obligations of companies that have filed with a federal court for protection under Chapter 7 or Chapter 11 of the United States Bankruptcy Code.
Ampleton Group is also an active acquirer of both listed and unlisted shares in companies which are hard to monetise due to lack of interest or attention from larger market players.
As well as bankruptcy claims, Ampleton Group provides liquidity to limited partners (LPs) who are looking to exit early from their investments in private equity and other fund structures.