7. Bankruptcy Claims – when a company goes bankrupt, its suppliers that are owed money have to get in line and let the bankruptcy judge sort out who gets paid and how much.
There is a vibrant market of investors seeking to purchase bankruptcy claims at a discount if they think there is a reasonably good chance of being paid back their principal plus a return on an investment.
Some people that are owed money would rather get a portion of that money paid to them now instead of waiting on the bankruptcy process to play out.
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