Toughening bankruptcy laws that took effect in mid-October
inspired a flurry of last-minute bankruptcy filings by publicly
traded corporations seeking the more lenient terms of Chapter
11 protection afforded by the old statute. All of this provided
ample investment opportunities for hedge funds looking for
event-driven opportunities in distressed companies and
One of the more curious of such buys was Gardenburger, the
California-based firm that helped popularize a "veggie burger"
craze in the mid-1990s with the help of prodigious advertising
on the Seinfeld show. Crushed by the anti-carb craze a` la the
Atkin's diet and suffering increased competition from rival
Kraft's popular Boca Burger, the franchise saw its fortunes
fall. Over the past 18 months, the company has been operating
at a loss, falling precipitously from its height of $100
million in net income five years ago. And investor indigestion
surely set in as the stock crumbled in...