Realistic expectations are the best protection against both bad decisions and offers promising the impossible. This article summarises what is and is not realistic with distressed bonds.
What cannot be promised
Nobody can responsibly guarantee recovery of a claim, a recovery rate in proceedings, or a specific payment date from the issuer.
Promises of that kind are a reason for caution, not confidence.
What is realistic
Verifying the state of the case, the quality of the documentation and the available options — and choosing between certainty today and uncertainty later.
It is also realistic to learn that a given route is simply not available for your issue.
Risks that get overlooked
The most commonly underestimated items.
- the risk of yet another deferral without performance
- the risk that a missing document prevents proving part of the claim
- the time risk of tied-up capital
- the risk that an awarded claim proves uncollectable
Setting your own boundaries
Decide in advance how long you will wait and how much you are willing to invest in enforcement.
A decision made against pre-set criteria is usually better than one made under pressure.
If you are unsure what is realistic for your issue, have it assessed over documents rather than forum impressions.
This text is general information for bondholders. It is not legal advice and not an investment recommendation. Capital Investing Ventures a.s. is not a law firm. Any individual assessment depends on the specific documentation and circumstances of the case.