Old equity under duress, seeking recovery.

• Author: Kristie, James
• Position: Book it: Best bets for board reading

From Equity Holders Under Siege by Henry F. Owsley and Peter S. Kaufman. Copyright [c] 2014 by Beard Books. Published by Beard Books (www.beardbooks.com).

For any distressed company, going through a restructuring process is unpleasant. Layer on top of that a mission to extract value from a situation where other, more senior constituencies are being financially disappointed, and you are looking at a truly daunting process, one that is potentially expensive and offers no guarantee of success. So why would a rational Old Equity player ^undertake such an effort? The short answer is: for financial and other gain.

Old Equity may be a private equity fund seeking to achieve the highest possible portfolio returns in an increasingly competitive investment environment.

Or Old Equity may be the company's founder, who has experienced setbacks and now faces the prospect of lenders selling the business out from under him.

Or Old Equity may be the board of directors of a public company. The directors may have been with the company for years, and have longstanding relationships with key stockholder groups.

Regardless of the identity of Old Equity, these various incarnations share some basic similarities. They are motivated, they want a...