Cerberus first acquired Guccione's debt in 1997 when the hedge fund purchased personally guaranteed debt owed by Guccione in connection with his ill-fated Atlantic City casino venture that cost him an estimated $140 million.

Following the meeting, the Government says, Mr. Milken's "junk bond" department purchased debt that would be the subject of such a swap.

Hedge funds purchasing distressed debt may prevent those companies from going bankrupt, as such an acquisition deters foreclosure by banks.

And on a voice vote, the Senate approved a major change in the provision requiring the Treasury Secretary to initiate talks on the establishment of an international facility to purchase debt from developing nations.

Central banks are usually forbidden by law from purchasing debt directly from the government.

October 21: The US Federal Reserve announces that it will spend $540 billion to purchase short-term debt from money market mutual funds.

While a large portion of that money has been used simply to pay off other lenders, it has clearly eased pressures on the banks and helped free up cheap money the banks can use to purchase sovereign debt.

Paul argued against the $700 billion bailout proposal to purchase toxic debt during the economic crisis of 2008.

Large investors often sell Treasury bonds to hedge against expected declines in the market, while purchasing corporate debt and other dollar-denominated securities.

Allegheny's case has been complicated by a fight for control between the company and the investment group Japonica Partners, which says it has purchased enough debt to become Allegheny's largest creditor.