When a large listed industrial group defaulted, one of the special-situations funds with exposure wanted more than the insolvency process would volunteer: an independent forensic and investigative review of the group and its related entities, to understand what had happened to value and where the group's dealings would bear scrutiny.
“The group's structure and related entities were mapped, and its public record and press trail read closely.”
The work, carried out during my tenure at a global investigations firm, applied investigative methods to a distressed group. The group's structure and related entities were mapped, its public record and press trail read closely, and the questions a creditor most needs answered were pursued: which transactions look ordinary, which do not, and what that means for recovery.
Creditor-side forensics differs from a company-side investigation in that there is no cooperation to rely on. The work has to be built from the outside, from filings, registries, litigation records and market information. It also has to be careful, because its conclusions feed decisions on enforcement and negotiation. I take the same approach now for resolution professionals, committees of creditors and funds with distressed Indian exposure.