It took Fidelity far too long to realise that the banks meant what they said when they threatened to put the advertising company into liquidation. Other investors had appreciated that the banks were serious much earlier.
When Fidelity next demands better terms in a restructuring, will anyone take it seriously?
Bankers will know that it has caved in before and, rightly or wrongly, will expect it to do so again. Other investors prepared to fight for better terms may prefer to team up with firms they reckon will stay the course.
You would have thought Boston-based Fidelity, one of the largest equity investors in the world, knew the risks it was taking. It has been involved in similar knife-edge deals before, on both sides of the Atlantic.
In 1989 it stood out against the terms of a restructuring of Hillsborough, an American buyout arranged by Kohlberg Kravis and Roberts, only to find it was the first Fortune 500 company to file for bankruptcy. Henry Kravis, then still powerfull on Wall Street, had meant what he said when he told Fidelity that KKR was prepared to file for Chapter 11.
It is natural enough that Fidelity should want a better deal for equity or preference share holders. But it has risked its reputation, at least in London, by pursuing its cause too hard.