How to make money by investing in bad assets

(1) Work before investing in the creditor's rights (package)

1. Before purchasing the investment creditor's rights (package), you will get some basic information about the creditor's rights (package) from banks, auction houses and other institutions, including the debt region, the debtor, the legal status of the creditor's rights, the principal and interest of the debt, etc. For some creditor's rights with large value in the package, the seller sometimes lists the highlights of the creditor's rights in order to attract buyers to invest: the business information of the debtor involved in the debt, the assets owned, etc. for investors' reference.

after obtaining this information, private asset management companies make the initial adjustment. Usually, they use low-cost information acquisition methods, such as online search: Industrial and Commercial Credit Network, Court Executed Inquiry Network, etc., to understand the debt subject and assets. Those who have personal connections will also ask relevant people. Those who provide highlights of creditor's rights sometimes go to the industrial and commercial bureau, housing authority, land bureau, tax bureau, court and other institutions to verify relevant information. Even go to the debtor's office, factory ... to find workers and surrounding residents to understand the situation.

2. Review papers (contracts, judgments, etc.) before purchasing.

After collecting information for the first time, private asset management companies evaluate the packages, select the most valuable ones or dozens of claims (usually claims with large principal), and calculate the investment value according to their own resources and past experience. If there is, it will sign a letter of intent with the seller, and then it can go to the seller to read the papers: that is, the loan contract and legal documents of the creditor's right at that time. After marking the paper, summarize the collected information again (see the substantive disposal stage for details later), evaluate the asset package and decide whether to invest or not. If there is investment value, the investor pays for the package and hands over the file.

usually, there are several relatively good creditor's rights in an asset package, such as the assets are sufficient, or the debtor is in business, or the legal status is clear ... the value supporting the whole asset package, plus the creditor's rights of other bankrupt enterprises, etc., and the proportion of each depends on the specific situation, and the asset package pricing will be determined accordingly.

the original file can be kept by the seller or the buyer, or it can be kept by a third party, and both parties can negotiate. There are relevant provisions concerning the custody of the original files of state-owned assets. See the fourth part for details. Payment is usually made by installment, and it is rarely required to pay in full. Usually it is bidding, and there are also a few agreements to transfer. See other bidding methods, similar situations, bidding, etc., and the process is not obvious.

(2) After buying the creditor's rights (package), it entered the substantive disposal stage

The disposal of bad products was also started before the purchase was confirmed. In addition to repeating some methods before buying the creditor's rights, we should collect information in more detail. Of course, these methods will also be used in the evaluation before buying the creditor's rights (packages), and according to: number, project leader, debtor, guarantor (guarantor), principal, interest, region, legal status, litigation time, execution time, bank and agent, court and agent, asset highlights, project. Usually, after buying the package, the private asset management company will carry out the project internally, and keep following up:

1. Try to find all the owners involved in the creditor's rights: directors, managers and financial personnel of the debtor ...... managers in the contract: bank lenders, etc ......................................................................................

2. Go to relevant institutions to inquire for more creditor's rights information: the Industrial and Commercial Bureau adjusts the industrial and commercial information of the debtor, goes to the court to adjust the judgment and execution, goes to the Land Bureau of the Housing Authority to check the fixed assets, goes to the tax bureau to check the tax, goes to the bank to check the deposits, and the latest laws and regulations of the courts, the Ministry of Finance, the State Council, the China Banking Regulatory Commission, the China Securities Regulatory Commission, the China Insurance Regulatory Commission, the procuratorate and other institutions on bad disposal.

The main purpose is to know enough information to restore the "story"-how the debt came about: whether it was the business problem of the subject, whether it was a fake case made by the bank and the court at that time, or other reasons; Find assets that can be disposed of; The disposal of assets faces legal or other obstacles; How to solve it, look for legal and policy support, and so on.

3. After finding the assets and solutions, the asset management company uses all legal and reasonable means and resources to cash back. The disposal method depends on the following: the debt subject (operating, preparing for listing, closing down, restructuring, bankruptcy, etc., social background), the background of the debt subject management personnel, the assets (whether there are fixed assets, liquid assets, etc., whether the valuation covers the principal and interest, etc.), the legal status (sued, not sued, judged, executed, limitation of action, etc.), the local judicial environment, the policy environment, and the causes. There are almost no two identical solutions to the complex situation of each creditor's right, but the usual methods are as follows:

3.1. Go to the door to talk about paying back the money: reconciliation, which is the lowest cost way for debtors and creditors. It is generally not successful for creditors to go to the debtor directly. After all, it is an antagonistic relationship to owe money, and sometimes a settlement can be reached through intermediaries. Usually, the creditor will send a collection letter, the tax bureau, the fire department and other departments will check it, find the news media exposure and other auxiliary pressures, and combine the following methods.

3.2. Asset management companies, as creditors, collect their debts through legal procedures: this method is costly, and it is only used by creditors with large returns, and it is also a means to exert pressure to establish the local influence of creditors on debtors. Most employees of asset management companies have legal knowledge and disposal experience, and it can also reduce costs to collect the money by themselves. Generally, the debt subjects are hard stubble, and there are many contacts with the judicial system (courts, procuratorates, public security bureaus, etc.): some can resume execution; Some also make judgments, take the court to seal up assets and execute the judgment; Some applications that have not been executed are executed; The appeal of this appeal, the additional addition ..... meets the lawsuit that the bank debtor court unites to make a false case, which can best comprehensively reflect the ability of an asset management company or practitioner. The bad circulation in the market is generally judged by the court before 212.

the biggest difficulty in taking legal procedures lies in execution, and it is very important to avoid leaking information and preventing debtors from transferring assets in advance. In fact, the confidentiality of relevant information is needed in the whole bad process from before purchase to the completion of payment. When a debtor is in business and has liquid assets, he usually does not go to the door to talk about paying back the money first, and directly enters the judicial process to execute the payment.

In litigation, how to put forward effective solutions within the legal framework system is a technical activity. I don't know much about it here. I'm interested in checking the case studies of court-related asset management companies online, or communicating privately. Personally, this is also a way to identify the legal level of a practitioner or even an asset management company. For example, according to relevant laws and regulations, private asset management companies will take legal actions such as litigation in the name of creditor banks or financial asset management companies, and the recovered funds will first be put into banks or financial asset management companies, and then transferred to private asset management companies. As for the reasons, please go to 4 to find relevant laws and regulations. Another example is: in a divorce case, one party does not intend to divide the property, so it transfers the property by means of external liabilities, and both the debtor and the creditor will use this similar method to dispose of non-performing assets.

The court has a stiff attitude towards non-performing assets cases: all parties have a lot of room for operation when formulating relevant laws and regulations at first, and the court can refuse to accept the initiation of such cases or vigorously promote the execution of cases. In addition, most local enterprises are also related to the local judicial and police systems, so it is difficult to dispose of them.

In addition, it may involve the appraisal auction of fixed assets that are not easy to realize. In fact, those who buy these assets auctioned by the court will face some legal or other obstacles later, such as the debtor staying in the house and not moving out; The disappearance of the debtor, some formalities can not be handled, etc. Therefore, asset management companies like to meet people who are executed with current assets: cash and equity, which are easy to realize.

3.3. Asset management companies entrust lawyers to collect the money through legal procedures: there are not many successful cases in this way, but more for the purpose of obtaining relevant information, establishing judicial system relations, expanding the local influence of creditors, and testing the debtor. Because local law firms have sufficient resources and information in the local area, they sometimes represent cases to lawyers to handle them badly. A bold lawyer will represent you at all risks, but usually lawyers don't. Sometimes lawyers simply act as intermediaries between creditors and courts, and establish a "firewall" to protect all parties.

Sometimes some asset management companies will outsource their disposal to some investment consulting management companies, and the bosses of consulting management companies are mostly people from the judicial system and lawyers' offices, and the methods used are similar to those described in this paper.

3.4. Transfer of creditor's rights: that is, common investment methods: buy low and sell high, buy the whole package at a discount at a low price, increase the value by finding assets, and then split it into small packages and sell it at a price higher than the purchase price. The creditor's right of an asset management company that is difficult to handle without sufficient resources or information will be transferred to people who are familiar with the creditor's rights or new buyers who can benefit from the creditor's rights. As for the transfer price, it is the same as the purchase method of the asset management company, listing the basic information of creditor's rights, asset highlights, etc., so as to ensure their own profits and leave profit space for new buyers. New buyers include, but are not limited to, debtors themselves, lawyers, retail buyers and other buyers .......

Some projects will be transferred to new buyers after filing a case, litigation or judgment or execution ..................................................................................................................

here is a case: for example, some local debts, the asset management company has been pursuing repayment in various ways, and the leaders have a headache, so the third party who needs the place will be very sensible to buy the debt from the asset management company.

in the way of transfer, the financial asset management company is in a special position, and basically lies down to earn the difference: for example, in order to modify the financial report at the end of the year, the bank packaged the loan and entrusted it to the Big Four before bad debts were about to occur, and the bank handled it by itself, and then bought the loan back after the year. Here, banks only borrow four channels to achieve their goal of reducing the bad debt rate. Similar local governments also operate in this way.

3.5. Some creditor's rights may also include asset reorganization and debt-to-equity swap. Because it involves specific cases, it will not be described again. You can go to the court website to search for the public judgments of relevant management companies to study. Or other published books and other materials to learn.

3.6, there are other ways of non-investment behavior. For example, tax avoidance with bankruptcy claims; Buy bad products from banks and get corresponding loans for consideration; Between banks, that is, between institutions, non-investment behaviors such as buying bad products from each other to show off, ensuring their maximum income and reducing the rate of bad products are handled.

3.7. Some companies have been working hard to securitize non-performing assets and issue wealth management products. As of October, there were eight securitization products before. From the results, I personally think that asset securitization is general, not even strict. With the development of the industry, high-level officials are beginning to study the path of bad securitization. With the popularity of the Internet, we are also exploring the internet plus way, but the essence is not much different. The company that provided bad information platform finally turned into a bad disposal platform company and directly engaged in bad investment and management. Half a month after the second edition (the sixth edition has been updated as of November 19) was written, Cinda and Alibaba announced that they were selling bad assets online. In early 214, the two sides were brewing this matter. Personally, this is more of a gimmick. Huarong followed Cinda and also cooperated with Taobao in December.

the core of the traditional way to deal with non-performing assets is to solve the information asymmetry and find the assets that can be disposed of: physical assets, land and houses; Valuable virtual assets, equity, accounts receivable and so on. Entering the stock period, the disposal of non-performing assets urgently needs to find innovative disposal methods.

More often, a variety of disposal methods are mixed, mostly gray means, and it is not excluded that individual asset management companies use black means. Either way, usually the interest can't be recovered, and the principal can't be recovered in full (usually the asset management department of the bank and other institutions will collect the principal that can be recovered). As far as the whole package is concerned, the creditor's rights with a principal of less than 1 million are used to ensure the cash flow of the team's operation, while 1 million to 1 million are used to share the cost of buying the package and the income of the guarantee foundation. Most of the creditor's rights with a principal of 1 million are used as key income items and a major premium of the asset package.

(3), financial treatment

The fourth part should simply list the relevant laws and regulations, but there are many people asking, so the third part is put separately.

General private asset management companies usually set up a clean project company when purchasing non-performing asset packages, and the project company is usually an investment management company or a consulting company, where there is a large financial processing space, which can be investment management consulting fees, accounts receivable, foreign investment income and so on. The general payee can be a company account or even a personal account, depending on how the debtor, the creditor and the court communicate with each other. Please refer to the laws and regulations in the fourth part for the relevant taxes through legal procedures. If the settlement is reached, the formal asset management company may issue invoices, and the accounting methods handled here may be relatively small. Please refer to the financial treatment methods of investment companies in Zhihu, which is not profound. If it is a personal asset management company, the operating space is huge, and even the receipt does not need to be opened, and the individual collects money. As for tax avoidance, refer to other reasonable tax avoidance, which is not much different in essence. Non-performing assets are even used for legal money laundering, so it mainly depends on the purpose and ability of investors or buyers. Non-performing assets are a "prop" here.