17.10 American Home Mortgage Investments filed for Chapter 11 bankruptcy in late 2008. The company indicated that it chose this course of action because it represented the best means of preserving the firm’s assets. W.L.

Ross and Company agreed to provide the firm $50 million in debtor-in-possession financing to meet its anticipated cash needs while in Chapter 11. Comment on the statement that bankruptcy provides the best means of asset preservation. Why would W.L. Ross and Company lend money to a firm that had just filed for bankruptcy?