Distressed Securities is a financial instrument in a company that is near or is going through personal bankruptcy. This usually results from company’s inability to satisfy its financial obligations. As a result, these financial instruments have suffered an amazing reduction in value. Distressed securities may include common and desired shares, bank credit card debt, trade claims as well as corporate bonds. A distressed securities fund is a hedge fund or perhaps private equity pay for that invests in debt considered to be very weak or perhaps in imminent default, referred to as distressed securities.