Windstream Holdings

Windstream's February 2019 bankruptcy was triggered by a hedge fund's legal maneuver. The rural telecom company had completed a sale-leaseback of its fiber network in 2015. Aurelius Capital argued this violated bond covenants, winning a court ruling that made $310 million in debt immediately due. Windstream filed bankruptcy within 24 hours. The case demonstrated how financial engineering can create hidden landmines - transactions that seem rational at the time but contain covenant triggers that sophisticated investors can weaponize.