Tranche Warfare - Who Will Be the Experts?

Remember the days of old when debt when most Restructuring cases involved relatively simple capital structures. Obviously, those days are long gone.

Over the last decade, through the growth in securitization and in trading of risk layers, many troubled companies now have complex capital structures and even more complex debt ownership issues.

Welcome to the era of tranche warfare, where the combination of contractual legal rights, bankruptcy law, and debt holder negotiating skill will determine the winners and losers in a given battle.

Although the majority of the early wars have been occurring in real estate matters (one example of which is well described in a recent Wall Street Journal article regarding the John Hancock Tower in Boston), versions of tranche warfare will also be playing out in non real estate distressed situations.

So here is the relevant question for this blog:

who are the professionals who will quickly carve out a name for themselves as being the best at tranche warfare?

Will this be exclusively the turf of lawyers, or will some investment bankers become the "go to" resource for holders of paper?

Fortunes will be made...and lost...playing the high stakes game of tranche warfare. Professional reputations will be made...and presumably lost...in these high stakes games.

Certainly not your father's Oldsmobile.

Change represents such great opportunities for the astute, who are also agile.