Private Equity Tax Alert — Distressed Debt Restructuring

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In the midst of current capital and credit market volatility, private equity funds have numerous issues to consider. They should examine how to protect the value of their fund’s investee companies and find opportunities to acquire interests in businesses expected to perform well when conditions improve. This may include acquiring a company’s or income trust’s debt available at a discount to its principal amount.

However, when purchasing the debt or equity of distressed companies, private equity funds must consider the debt forgiveness and debt-parking rules. Read this Private Equity Tax Alert to learn the related issues and tax consequences.


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