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Researchers at the University of British Columbia, Queen's School of Business and Columbia Business School think so. In a recently published report, it was found that when distressed investment managers are involved in a company's bankruptcy restructuring, the outcome is significantly better. From the report: First and foremost, we find that hedge funds, rather than being simply "anti-management," are behind the transformation of the traditional "management-driven" restructuring process to a more "management neutral" one. Hedge fund presence on the debt side is overall associated with a higher probability of emergence. Though there is higher CEO turnover in cases involving hedge funds, so is the implementation of key employee retention plans (KERPs). The combination reflects hedge funds' desire to replace failed leaders while in the meantime to ensure continuity of management and operation after the firm emerges. So basically, hedgies provide the necessary service of kicking to the curb ineffective management, while at the same time keeping on key employees. Second, hedge funds' strategic entry point to the distressed firm's capital structure facilitates their goal of having a big impact in the reorganization process, and their involvement seems to be effective in achieving the intended goals for the part of capital structure they choose. Unsecured debt is the most common choice for hedge funds to approach distressed companies. As mentioned above, hedge fund presence increases the likelihood of successful reorganization, so does the likelihood of hedge fund converting their debt claims into new equity and thus enjoying the upside potential upon case resolution. The study does note, however, that when hedge funds are large shareholders of bankrupt firms, they choose firms with relatively strong fundamentals, which echoes a point raised by financial blog All About Alpha: "The cynic in us wonders if hedge funds are just better at finding opportunities and if the ensuing positive equity performance is really just a self-realized prophecy." All About Alpha continues: If the cynic in us is wrong ... and activist hedge funds really do add value to distressed companies, then they are essentially arbitraging the difference between the value the market puts on unsecured distressed debt and the actual value of that debt given that it may not actually be that unsecured after all. - Sara Behunek
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Are hedge funds an emerging force underlying the changing nature of Chapter 11? 
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thanks for sharing this valuable info with the public. So it will help people who are interested about bankrupt companies
and they will also thank you for your great efforts..