It’s interesting, the parallels you can find between different areas of life. Forbes Magazine, in its first issue of the year, ran a feature article about a stock “guru” named George Putnam, who recommends buying stocks of companies that have emerged out of Chapter 11 Bankruptcy proceedings. Needless to say, as a bankruptcy attorney in Indiana helping individuals and small businesses through the process of preparing for and filing bankruptcy, I was interested in what the guru had to say about these companies with a history of bankruptcy in which he is now recommending investors put their money.

Now, mind you, George Putnam is discussing pretty big companies, those that have market capitalizations (meaning the worth of all their stock) of more than $25 million apiece. For example, he mentions Owens Corning (in the building products field), Delta and Northwest Airlines, Federal-Mogul (automotive products), Silicon Graphics (computers), Adelphia Communications (now owned by Time Warner Cable), and Winn-Dixie Stores (supermarkets in the Southeast U.S.). A big, big caveat is in order here: Far be it from me to offer investment advice to anybody! What so fascinated me were the comments Putnam made about these companies, and just why, even though all of them had gone bankrupt, he thought they were worth investors’ attention going forward.

The article explains that post-bankruptcy stocks can be very attractive. (And here’s the part I love): “The bankruptcy process gives a company the opportunity to solve its problems and reshape its business. As a result, the company that emerges out of Chapter 11 is often much stronger than it was before filing for bankruptcy.”

Wow! I think Putnam captured the essence of the whole bankruptcy process in those two sentences. When debtors get the right kind of professional advice, then follow through with each step of the process, bankruptcy truly signals a new beginning for them and their families. I see people emerge stronger than ever, ready to take on life’s challenges with greater wisdom and finesse. George, you may get a kick out of investing in post-bankruptcy companies. For me, though, it’s post-bankruptcy people that are so worth investing in! They are what makes my work so rewarding!.