FICC Focus Matt Doheny on Investing, Yellow, and FTX: State of Distressed Debt
Jun 14, 2024
Matt Doheny, founder of North Country Capital and expert in turnaround strategies, shares insights on high-profile bankruptcies like Yellow Corp and FTX. He discusses the complexities of restructuring, detailing the fierce competition between lenders and the unique auction process at Yellow. Cohost Nagisa Balluku adds her expertise on the latest bankruptcy developments, including issues surrounding Red Lobster and WeWork. Their engaging conversation uncovers the intricacies of distressed debt and the evolving landscape of crisis management.
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FTX Was A Wild West Without Controls
- Doheny described FTX as lacking any corporate infrastructure and resembling a 'wild west' where assets could leak.
- He credited John Ray and Alvarez & Marsal for rapidly building controls to stop value leakage after takeover.
Never Take A Role Without D&O
- Always secure full D&O coverage before accepting a director or CRO role in stressed companies.
- Decline roles where D&O is unavailable or inadequate, especially if joining pre‑petition.
Map Incentives Before You Invest
- Know the decision‑making incentives of every counterparty before you bet on an outcome.
- Map roles and incentives precisely because process and incentives drive restructuring outcomes.