If the agreement is allowed, he said, it could become a model for other distressed companies to follow.

Blackstone and several other firms have already begun efforts to buy assets from distressed companies.

"This is not unusual," said one investor in distressed companies.

When you have a very distressed company, it's the lenders, not the shareholders, who really own it.

Cerberus, which has about $9 billion in funds under management, is a big buyer of distressed companies.

Early on they were created to save distressed companies or to encourage war production.

Sometimes, stock ownership plans are set up as a last-ditch effort to save a distressed company.

Getting protection in writing is important for many executives and managers these days, especially at distressed companies.

There are other adjustments to the financial statements that have to be made when valuing a distressed company.

Investors may also invest new capital into a distressed company in the form of debt or equity.