This term is explained in page 9 of chapter 15. However, I struggled to understand what it means (and its application) even after some research online. Could someone help please? Thanks!
Maybe someone else has further input on this. My feeling was that, if a company is struggling and needs new finance, the traditional way of looking for equity and debt investors can cause problems. Debt investors want security, and as soon as the difficulties re-emerge, shout for the company to be wound up. This can have agency problems. However, if all the rescuers accept a bundle that contains some equity (or preference) and some debt, they may be more keen to help the company along when the inevitable problems occur.
