Lend to a Chapter 11 debtor with super-priority priming lien — highest recovery, often equity conversion.
DIP financing is loans to a Chapter 11 debtor with court-approved super-priority status — DIP lender is FIRST in line ahead of pre-petition secured lenders. Rates 10–15%+, fees 3–5%, often with equity conversion or warrants. Requires §364 court approval, 'roll-up' of existing debt often permitted. Provides massive returns + optionality to convert to equity via plan of reorganization. Best played through specialty DIP lenders (Antares, Owl Rock) or family offices as LP.
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Bankruptcy Code §363 lets you buy a distressed company's assets free-and-clear of liens, at deep discount, in 60–90 days.
Buy unpaid property tax liens from counties (28 states) — earn statutory interest 8–24% + possible property acquisition.
Tax deed states auction the DEED itself (not lien) after redemption expires — buy property for delinquent taxes only.
Buy defaulted mortgage notes from banks/hedge funds at 30–60% of UPB — foreclose, modify, or DIL for equity.
Cheaper/faster alternative to Chapter 7 — buy assets of failing companies via ABC in 30–45 days.
Buy property/business assets from a court-appointed receiver — clean title, court-approved discount pricing.
Buy litigation-in-progress bankruptcy claims (preference recovery, fraudulent transfer) at 20–40% of face value.
Buy verified claims in bankruptcy or mass tort settlements at deep discount from claimants needing liquidity.