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Bankruptcy-related M&A at 5-year high – more to come?

This week’s Thomson Reuters Investment Banking Scorecard shows bankruptcy-related M&A at a five year high.

 

There were five bankruptcy-related M&A deals announced during the week, including the acquisition of venture-backed public company Nanogen by French investment holding company Financiere Elitech for $25.7 million. 

 

So far this year there have been 173 bankruptcy-related deals, the highest level since the same period of 2004 when there were 202.

 

During 2009 the most bankruptcy-related M&A deals have occurred in the industrials sector with 23 percent, followed by the media and entertainment sector with 16 percent. 

Dead stock rallying

General Motors is about to exit bankruptcy, perhaps as soon as today, selling most of its assets to a “New GM,” with the U.S. government in the driver’s seat. The legal obstacles have all been cleared. There is no hope of the shares of the old GM being worth anything more than the paper they are printed on.

Today, the stock is rallying, up 14 percent in late morning trading. That trading, as it is for shares of other companies in bankruptcy, is on the pink sheets, which is a wild west frontier town for stock investors.

Lehman’s huge NYC tax bill

New York City wants Lehman Brothers’ outstanding tax bill paid off now–or at least before any other creditor gets money in the bankruptcy case.

Earlier this month, the city tax office filed a $626,999,222 claim against Lehman’s bankruptcy estate. In the official notice, NYC says its claim should be “allowed and paid in full as a priority claim in advance of any distribution to creditors.”

from Neil Collins:

A haircut or a headcut for GM bondholders?

Bill Zastrow owns $240,000 of General Motors bonds. He's not happy, but, as he told Reuters' Kevin Krolicki, "We were getting the Marie Antoinette haircut and now it looks like it's a few inches higher."

The best guess is that his holding is now worth about $22,000, not far away from the sum he used to get in annual interest, but that's better than the zero-to-$12,000 which the earlier offer to bondholders implied.

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