Description: Bankruptcy filings are surging due to the economic fallout of Covid-19, and many lenders are coming to the realization that their claims are almost completely worthless. Instead of recouping, say, 40 cents for every dollar owed, as has been the norm for years, unsecured creditors now face the unenviable prospect of walking away with just pennies — if that.

Source: Bloomberg.com – video report

Date: Oct 26, 2020

Link: https://www.bloomberg.com/news/articles/2020-10-26/bond-defaults-deliver-99-losses-in-new-era-of-u-s-bankruptcies

Questions for discussion:

• What is the concern in the bond market?
• Why have creditors received so little after bankruptcies?
• Is there a a solution?
• What should investors do given this information?