George Schultze is the founder of Schultze Asset Management and author of “The Art of Vulture Investing.” George classifies himself as a “vulture investor,” investing in distressed securities and companies that are troubled. His particular strategy revolves around 3 areas of investment: shorting companies on their way into distress, focusing on loans or bonds at a discount when they are in trouble, and after they have reorganized, investing in their post-reorganization equities.
George gives insights from his career in vulture investing, such as sitting on the creditors’ committee of Tropicana Entertainment (Tropicana Casino) and helping to bring that company out of bankruptcy. He is known publicly as one of the “Chrysler Holdouts” for owning Chrysler‘s senior secured debt before the Obama administration’s out-of-court debt restructuring plan, and for fighting that restructuring. George talks about avoiding the dangers of government intervention in bankruptcy investing, and describes his process of identifying distressed industries and companies, citing leverage as the most critical indicator in pushing them toward bankruptcy.
Despite the popular connotations associated with vulture investing, George says the process is healthy because distressed securities investors push capital from dying to healthy businesses, preventing “zombie” companies from lingering in the system.
Learn about the following:
- What is “Vulture Investing”?
- Waiting for the opportunity to develop
- An arbitrage between forced sellers and normal long-term buyers
- Structural limitations on what banks can own can leave attractive assets
- Beware political environment and government intervention in bankruptcy investing
- Leverage is the key in identifying troubled industries and companies
- Factors when evaluating industry bankruptcy trends
- How to classify a vulture strategy for investors
- Why vulture investing is healthy and allows capital to be redeployed from dying to healthy businesses
- Examples and explanations of successful vulture investments
George J. Schultze is Managing Member and Founder of Schultze Asset Management, LLC (SAM). He chairs the firm’s Investment and Strategy Committees and, together with his team, makes the final decision on all investments for the portfolio. Mr. Schultze is widely recognized as an expert on distressed and special situations investing and is often quoted in the media regarding high profile reorganization cases such as the Chrysler Automotive bankruptcy. He is also a frequent speaker at industry conferences and graduate schools such as Harvard Business School. Prior to founding SAM, he honed his activist distressed investing approach with MD Sass. Before that, he was employed with Fiduciary Partners fund of funds, the Mayer Brown & Platt law firm, and Merrill Lynch.
Mr. Schultze is a joint graduate of Columbia Business School and Columbia Law School, JD/MBA. He founded the Columbia Law School Investment Club and served as editor for the Columbia Business Law Review. He also authored several papers including: Negotiating the TWA Bankruptcy Restructuring, Tax Factors and ERISA Implications of Corporate Restructurings, and International Banking Law. While at Columbia, he placed 2nd in the 1995 business school annual stock-picking contest.
Mr. Schultze earned a BA from Rutgers College where he graduated with a joint major in Economics/Political Science and the Henry Rutgers Scholar distinction. While at Rutgers, he won The Wall Street Journal Award for Excellence in Economics and placed 23rd nationwide (from over 14,000 participants) and first place at Rutgers in the 1991 AT&T Annual Stock Picking Contest. Although born and raised in the U.S.A., Mr. Schultze is fluent in German and Spanish.
[less]
George Schultze is the founder of Schultze Asset Management and author of “The Art of Vulture Investing.” George classifies himself as a “vulture investor,” investing in distressed securities and companies that are troubled. His particular strategy revolves around 3 areas of investment: shorting companies on their way into distress, focusing on loans or bonds at a discount when they are in trouble, and after they have reorganized, investing in their post-reorganization equities.
George gives insights from his career in vulture inve
...more
