While Wall Street currently grapples with a tightening credit
market that may kill the buyout boom, it could be worse. Five years ago,
buyout firms were facing an increase in defaults, according to an Aug. 8,
2002, report in The Deal. In the first half of 2002, 46 PE-owned companies
filed for Chapter 11 bankruptcy protection or out-of-court restructurings
endangering $7.6 billion in equity investments, and another six companies
teetered on the brink
(see
chart). For comparison's sake, only 64 PE-backed companies worth $12
billion in equity were in distress in all of 2001. Some of the notable 2002
failures included European cabler Callahan Nordrhein-Westfalen
GmbH, sportswear maker Spalding Holdings Corp.,
publisher Ziff Davis Media Inc. and aircraft maker Fairchild Dornier GmbH.
—Matthew Wurtzel
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story from TheDeal.com
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