To be a good value investor, you must be a good credit analyst.   Over the years, I learned so much from the many investors I’ve met through Heilbrunn. I’ve shamelessly incorporated these ideas and insights into my lecture notes and the curriculum. Today’s guest is one such person.   Mitch Julius has had a disproportionately large impact on both my thinking and the program design. Now he joins me for a conversation about the rich interactions between the nature of the firm’s business operation and the liability side of the balance sheet.   Mitchell R. Julis is the Co-Founder, Co-Chairman, and Co-Chief Executive Officer of Canyon Partners, LLC. Mitch is a graduate of the Woodrow Wilson School at Princeton University, Harvard Law School, and Harvard Business School. He received an honorary doctorate from Yeshiva University of New York in 2011. Before forming Canyon, Mitch directed a group of professionals responsible for a distressed and special situation securities portfolio at Drexel Burnham Lambert. He was a bankruptcy and creditors’ rights attorney at Wachtell, Lipton, Rosen & Katz in New York.   In this episode, Mitch and I discuss his journey from Bronx to Beverly Hills, the juxtaposition of accounting and accountability, why increasing spending power can undermine our federal system of competition, the four P’s of understanding governance, Mitch’s accidental entry into restructuring and bankruptcy law, arbitrage opportunities that arise in distressed situations, his approach to risk assessment, and so much more!     Key Topics:   Welcome Mitch to the show (0:39) Mitch’s rich childhood in the Bronx (3:14) The journey to Princeton and Mitch’s goal to go to the Woodrow Wilson School of Public and International Affairs (9:35) The juxtaposition of accounting and accountability (15:47) Why increasing spending power can undermine our federal system of competition (18:09) How the four P’s of understanding governance play out in real-world situations (23:58) Mitch’s accidental entry into restructuring and bankruptcy law (29:31) Challenging the Countryman definition of executory contract at Harvard Law (33:12) Mitch’s unexpected career moves (35:39) How Mitch’s time at Drexel shifted his thinking about financial markets (38:30) Exploring arbitrage opportunities that arise in distressed situations (42:05) Using accounting to its maximum potential when modeling the evolution of the balance sheet (49:09) Insights from Canyon’s statement of changes in net financial obligations (50:09) Chapter 11 escape holes and loopholes created by the private equity world (54:49) Mitch’s approach to risk assessment (57:08) How the next financial crisis will play out (1:03:50) What keeps Mitch up at night with worry? (1:11:08) Mitch’s movie recommendations (1:15:14) Embracing a continuous learning mindset with humility (1:18:29) And much more!     Mentioned in this Episode:   Canyon Partners Richard E. Neustadt’s Book | Presidential Power and the Modern Presidents: The Politics of Leadership from Roosevelt to Reagan Philip Hamburger’s Book | Purchasing Submission: Conditions, Power, and Freedom Freddie Gershon’s Book | Sweetie Baby Cookie Honey: A Novel Sujeet Indap & Max Frumes’Book | The Caesars Palace Coup: How a Billionaire Brawl Over the Famous Casino Exposed the Corruption of the Private Equity Industry The Offer on Paramount Plus Rabbi Benjamin Blech’s Article | Bernie & The Godfather Spirited on Apple TV     Thanks for Listening!   Be sure to subscribe on Apple, Google, Spotify, or wherever you get your podcasts. And feel free to drop us a line at valueinvesting@gsb.columbia.edu.   Follow the Heilbrunn Center on social media on Instagram, LinkedIn, and more!