For over two decades, investing in liquidations claims of bankrupt companies has been a major focus for CarVal Investors. Liquidations are an attractive asset class because of their high barriers to entry, as well as their historically strong, uncorrelated risk-adjusted returns with downside protection and upside optionality. CarVal has established key internal legal and operational teams and processes necessary to effectively structure and manage these transactions. CarVal has also benefitted from its long-standing stature in the market by developing relationships with the firms and individuals pivotal in the bankruptcy and liquidations industries.
When investing in liquidation claims, CarVal will generally hold the claims and collect distributions made by the administrator/trustee until the final distribution is made. Alternatively, CarVal may sell the claims if there is an upside option.