The New York Times says of the parent company of Sotheby’s and Coldwell Banker,
Meanwhile, we are in the world of the walking dead. Companies such as Realogy have bonds that now trade at as little as 15 cents on the dollar and have a yield of more than 45 percent. This is not General Motors, where a government bailout may be coming. In this situation, the equity is worthless (and likely to remain worthless in any scenario) and the debt is getting close. Yet the equity holders (Apollo Management Group, in the case of Realogy) still control the company. This is partly an after-effect of the credit bubble — the Realogy debt, like much leveraged buyout debt, is “covenant-lite” and so the debt holders have little control over the company when things go south.
But in these circumstances, Apollo has every incentive to take the company’s cash and go to Vegas, or perhaps start mining for gold. These days, this might have a greater probability of success for the equity holders.
Well I’ll miss them.
For What It's Worth 