Default Capital Management

Default Capital Management: Asset Recovery in Insolvencies

When financial institutions fail, intangible assets such as investment portfolios, non-performing loans, real estate and other valuables must be isolated by an administrator or liquidator and converted into liquidity to eventually repay creditors. Commercial brokers, hedge funds and institutional investors often buy these assets under market value for corporate profits and personal gain, leaving the estate of the defaulting company with a liquidity based on a discounted price.

Default Capital Management is an alternative strategy where negotiations with administrators, liquidators and curators can lead to the purchase of corporate assets from a liquidation and distribute the proceeds to our customers, the creditors of a financial institution in default.

Distribution of profits derived from collateralized assets raises the recovery percentage for the creditors of the failing financial institution, while protecting the legal framework and addressing the pari passu principle. For our customers, the extra payment raised via the sale of the assets, complement the insured deposit protection, out of court settlement and the liquidation. There is no prioritization of creditors but merely an addition to the traditional recovery strategies. Funding of the assets or portfolio is discussed on a case by case basis with our customers only, where we reserve the right to choose our partners and invite creditors for participation.