Credit-Market Clashes Are Getting Uglier, Dirtier, More Common

They’ve become infamous in distressed investing circles: names including J. Crew, Serta, Boardriders and TriMark. Now you can add Incora and Envision Healthcare to the ranks.

The list of controversial debt deals that pit creditors against creditors is growing, and market watchers say it’s poised to get even longer.

Envision became the latest firm to stir up outrage after the KKR & Co.-owned physician-staffing company secured a $1 billion financial lifeline by shifting its most valuable assets to a new loan, tanking the value of its older debt in the process.

The transaction signals that ...