Originally Posted by Butterfly

^ for someone proficient in bankruptcy laws as you previously claim, you surely missed the bond pricing issue,

during the Chapter 11 phase, interests payments will default, that's normal, and the bond price of the issuer will crash, also normal.

What you don't know about is the recovery phase, and this is where a lot of money is made in bonds. Basically you buy those bonds when their ratings are "D" and when the company emerges from Chapter 11, their ratings are gradually restored. There is still a liquidity issue of the bonds as fewer dealers will make a market for them, but you still could make a bundle with those. Of course, there is risk attached to this process, but the returns are worth it. The recovery rate is historically high for high quality corporate bonds, so overall complete default is quite rare.

Will it be the case with LBH ? we will know for sure once they emerged from Chapter 11.