Cloud 9fin Lessons learned from the corrosion of Exide Technologies with George Schultze
Apr 9, 2026
George Schultze, founder of Schultze Asset Management and author focused on vulture investing. He recounts Exide’s multiple bankruptcies and how excess debt and regulatory hurdles derailed turnarounds. They discuss environmental liabilities, politics shaping recoveries, skills needed for distressed investing, and risks in private credit and complex restructurings.
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Bankruptcy Power Requires Aggressive Use
- Bankruptcy gives powerful tools to reset a company including cancelling debt, rejecting contracts, and shedding unprofitable lines.
- George Schultze cites Exide's failure to fully use bankruptcy powers and unaddressed environmental liabilities as reasons it re-entered distress.
California Plant Regulatory Delays Sank Recovery
- Exide's California plant faced repeated regulatory delays that prevented normal operations and ultimately impaired recovery.
- Max Frumes recalls reporting every regulator back-and-forth while creditors argued the company was essential to the market.
Always Price Political And Regulatory Risk
- When politics or government intervention are possible, factor that X-factor into restructuring outcomes.
- George warns government action (e.g., Chrysler) can reorder creditor recoveries unpredictably and even reach the Supreme Court.
