Client impact · Distressed assets
Legal and valuation staff stop rebuilding the recovery file
In distressed work the facts are scattered: claim documents with external counsel, recovery progress with regional teams, valuation assumptions with one analyst. We did three things: built a claim-level register that expands, moved valuation inputs into a reviewed table, and tied every recovery action, cost and cash receipt back to the same claim.
The institution
Buy the pool, hold the claims, work the exit
The capital is own funds layered with bank facilities and structured co-investment. The chain runs acquisition — holding — resolution: pool bidding, claim and collateral administration, recovery, restructuring, litigation and enforcement, transfer and write-off. Four lines share the work: group asset management, regional teams, legal, and finance.
The files were complete; the facts were not retrievable. Diligence reports, valuation reports and litigation bundles sat in the archive or on a shared drive. What did not exist anywhere was a single queryable line saying what this claim is now worth, on what security, at what stage of proceedings, under which recovery assumption.
The constraints are hard: five-tier classification and impairment face audit and shareholder reporting, acquisition pricing needs a reproducible basis, and every step in resolution has to point at a document — or nobody can explain who decided what.
Before the change: where the effort went
This describes the work and how it was consumed, with no percentage for resolution time. The compressible part of the cycle can only be measured from the node history of pools you already manage — and the pace of court procedure is not ours to compress.
| Step | Who carried it | How the effort was spent | Why it never closed |
|---|---|---|---|
| Pool diligence | Regional team, external counsel, valuers | Claim terms, collateral, litigation stage and enforcement progress held by three parties; gaps chased by phone; conclusions not provable claim by claim | No template and no owner per checklist item, so large pools get sampled and unsampled names are silently read as safe |
| Valuation and pricing | One analyst’s model | Recovery assumptions, resolution horizon, collateral haircuts, costs and taxes set by judgement; acquisition and resolution cases computed twice | Parameters outside the ledger meant the same pool produced two answers, with nobody able to say which was wrong |
| Recovery process | Regional team and legal | Visits, filings, enforcement, settlements and outsourced actions recorded in weekly prose; costs in the expenses system; cash hard to attach to a claim | Actions, documents and approvals never formed a loop, so progress could not be totalled and responsibility could not be traced |
| Classification and reporting | Finance and risk | Five-tier classification set by hand, with impairment, supervisory and shareholder bases diverging; rework concentrated in the reporting window | Reclassification carried no workflow and no stored rationale, so every variance had to be explained verbally |
The judgement
Build the claim file before you talk about resolution speed
The unit of modelling in distressed work is the claim, not the pool. A pool decomposes into names, each carrying security, guarantors, several rounds of proceedings, extensions and partial recoveries. Keep the book at pool level and you can never answer "what is this name worth now, and on what basis".
So the register is built at claim level — collateral, guarantors and court nodes attach to the name, and the pool becomes a view over those names.
- The register’s smallest unit is the claim
- Assumptions stored beside the conclusion
- Action, document and approval together make a trace
- Reclassification keeps history instead of overwriting
Three steps we took
Open the file, table the inputs, close the loop
None of the three steps changes who holds pricing or investment authority. They only make the basis of those decisions retrievable.
01 · Register
One file per claim
Pool, project and claim become three object levels. Each claim carries principal and interest balances, security and collateral, litigation and enforcement stage, and limitation status. Diligence checklists are templated, so a gap shows up as outstanding rather than vanishing.
- Deliverable: claim register and diligence checklist
- Deliverable: gap board
- Reviewed by: regional head and legal
02 · Parameters
Valuation inputs become records
Recovery assumptions, resolution horizon, collateral haircuts, costs and taxes enter a versioned parameter table shared by the acquisition case and the resolution case. Each valuation goes through a second reviewer.
- Deliverable: valuation parameter ledger
- Deliverable: four-eyes review log
- Reviewed by: risk and the pricing authority
03 · Loop
Actions and cash land on the claim
Every visit, filing, enforcement step, settlement and outsourced action is stored as an action with its documents; costs and recoveries post against the specific claim. Reclassification runs through a workflow that keeps the rationale and the previous value.
- Deliverable: resolution action register
- Deliverable: reclassification workflow
- Reviewed by: finance and compliance
Modules and counterparties in this scenario
Module names follow the company’s published product list; how the platform meets finance and case-management systems is settled in the assessment and the technical annex.
Acceptance measures
Same formulas, read as operations — finance — filings
Three of the four published measures apply here. In the consistency formula the tiers are read as operations register — impairment accounting — external filing; alert precision is assessed on asset-status and limitation-period warnings. The formulas themselves are not edited.
How we recomputed them here
| Measure | Calculation (as published) | Recomputation in this engagement | Sample and timing |
|---|---|---|---|
| Definition consistency | Share of identical metrics where the three tiers agree with zero variance | Four metrics — claim balance, interest accrual, collateral value, cash recovered — compared across operations, accounting and the filed pack; a variance closes only when explained by date, impairment policy or definition | Stratified across live pools, including written-off and partly resolved ones, not only newly acquired paper |
| Manual fallback hours | Overtime hours during filing season ÷ people involved, from system-captured effort | Counted only for attaching recoveries to claims, reclassification work and reporting rework, from logged effort rather than recollection | Reported for two consecutive reporting periods, separate from implementation hours |
| Alert precision on review | Share of triggered warnings confirmed as real risk by the business | Limitation, collateral-status and obligor-distress alerts each store an owner and a conclusion; misses are listed separately so "no false positives" is never read as "no misses" | Reported by alert class across two full quarters |
Resolution capability is not decided at the negotiating table. It is decided by whether you can state a claim’s balance, security and last action inside ten minutes.Catalpa delivery methodology
500+
institutions served on the platform (company disclosure, not this client)
5.6RMB tn+
assets covered (RMB, platform book basis)
10+
years of investment-sector experience (company basis)
15
offices nationwide, delivery near the client
Where this approach does not apply
Teams that flip single names or bridge positions without holding claims over time do not need a claim register; a structured diligence template is enough. And where resolution is fully outsourced and process data cannot be brought back, the platform can only record the mandate and the outcome, so the trace benefit is thin. In that case we first write the action and document requirements into the outsourcing agreement, then discuss the system.
Questions specific to distressed-asset delivery
Mechanism answers. They commit to nothing about recovery outcomes, court progress or audit conclusions.
How far back do you backfill pools already under management?
Where does litigation and enforcement progress come from? Can it be pulled automatically?
Downgrading a classification hits people’s bonuses. How do you stop the book being flattered?
What is the relationship to accounting and the case-management archive? Do they get replaced?
Outsourced recovery agents are not on staff. How are they traced?
Does any of this actually shorten the resolution cycle?
Next step
Take one pool you are holding right now
In a 45-minute assessment we work that pool live: which fields are missing, which assumptions were never tabled, where the trace breaks — then the order in which claim registration should precede classification closure.