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Distressed-Debt Investors Crack Open Wallets Amid Market Rout

March 9, 2020, 10:00 AM

Carnage, the raw material for distressed-debt investors, is suddenly in abundant supply, creating a boon for money managers and advisers who specialize in troubled companies.

The coronavirus scare has slammed some of the most vulnerable junk-rated companies, amid concern they’ll be cut off from cash as sales wane and credit markets tighten in a weaker economy. This could be a boon for distressed-debt funds, turnaround consultants and law firms that had to scrounge for workin recent years while easy credit kept struggling companies afloat.

“We’re all getting ready to be even busier than we are,” said Lisa Donahue,...

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