Business Law Question

DEBT is big business in the United States (all over the world, actually). The purchase and selling of debt and the delegation of duties associated with debt investment have major legal ramifications.

Context

This week we discussed assignment and delegation of duties. Read the article,

Investing in Distressed SecuritiesLinks to an external site.

, discussing how certain hedge funds and investment funds specialize in buying “distressed debt.”

Questions

What is distressed debt?

What is the advantage of buying      distressed debt?

What is the risk involved in      buying distressed debt?

Donna owes $10,000 to Barclays      Bank.  Harvey Hedge Fund is buying Donna’s debt to Barclays Bank for      $8,000. Is Barclays Bank assigning its rights or delegating its duties?

What is each party’s role (i.e.,      who is the obligor, obligee, assignor, assignee, delegator, or delegatee)      – your answer depends on how you answered Question 4. (hint: look at the      example from the readings re: Doug, Lydia, and Bruno)

Assignment Logistics