HOMEOWNERS who don’t keep up with their mortgage payments are liable to see their property repossessed by the bank. The same fate can befall private-equity firms that used large amounts of debt to finance big takeovers in the boom years, and can no longer pay back the loans. Just ask CVC, a London-based private-equity firm, which this week lost control of Nine, an Australian television network it paid A$5.6 billion ($4.5 billion) to acquire in deals between 2006 and 2008.

The channel will end up in the hands of a clutch of private-equity firms and hedge funds specialising in distressed debt. In the past 12 months these “vulture” investors bought the bulk of A$3.3 billion of loans extended to Nine from its banks at a fraction of their face value. Led by Apollo Global Management and Oaktree Capital, two American funds, they muscled out CVC by threatening to place Nine into bankruptcy. CVC will lose all of its A$1.9 billion equity investment, in what is thought to be the biggest private-equity loss in Asia, and among the biggest ever.

Distressed investors are sometimes maligned, but this deal is an advertisement for their restorative powers. A struggling magazine division had depressed earnings, making Nine’s large debt pile even less sustainable. With the magazine business divested and the debt excised, the company is now profitable. Upon hearing of the agreement, the broadcaster’s chief executive proclaimed: “Nine’s back!” Its fortunes, if not CVC’s, look much improved.

The problem for the vultures is that other carcasses are proving harder to unpick. Europe is where their hopes are highest. A survey by PwC, a consultancy, found distressed-debt investors have raised €60 billion ($79 billion) to buy loans from European banks, mostly with a view to precipitating defaults at the underlying firms and then taking control. Private-equity giants such as Carlyle and TPG have redirected staff away from normal buy-outs towards these “loan-to-own” activities. Lawyers are poring over documents to find ways to seize control of indebted firms.

So far, however, distressed-debt investors have been disappointed. “There’s not been a deluge [in Europe], we had been hoping for a deluge,” was the recent verdict of Howard Marks, Oaktree’s chairman. That’s because low interest rates and cheap funding from the European Central Bank have reduced the pressure on banks to slim down their balance-sheets by selling assets. Only a few loan-to-own deals have happened this year—notably in the debt of Endemol, a distributor of lowbrow television shows, and Fitness First, a struggling chain of gyms.

In America a few firms have fallen into the vultures’ talons—examples include Charter Communications, a cable operator, and Aleris, an aluminium processor. But roaring capital markets have enabled even distressed companies to refinance their loans. Some have protected themselves from scavengers by buying back their own bank debt at distressed prices, making it harder for the likes of an Apollo or Oaktree to push them out. And the complexity of wresting control from one shareholder continues to make “loan-to-own” deals relatively rare: repeated headlines about potential bankruptcy can damage the company being tussled over, leaving all parties worse off. “It’s a full-contact sport,” says Ben Babcock at Morgan Stanley. No wonder it happened in Australia.