Irrational World of Distressed Debt Leaves $15 Billion Idle (2)

It was a flashpoint in the world of distressed investing: Sanjeev Gupta’s infamous metals empire was falling apart as Greensill Capital imploded.

As turnaround specialists sought to grab debt of one of his key assets on the cheap, a single U.S private-equity firm swooped in to buy up the lion’s share -- at full price.

While the supply-chain saga has sparked a lobbying scandal in the U.K. political establishment, for troubled credit creditors it shows the everyday challenges of deploying the $15 billion lying idle in distressed funds. Thanks to a central bank-fueled financing bonanza, even borrowers on their knees ...