Alternative view (not necessarily my view): Hedge funds are able to buy companies that are already in trouble. They do a lot of up-front financial engineering to free working capital for last-ditch efforts. Frequently, those last-ditch efforts don't work and the companies fail anyway.

Obviously, this isn't universally true, but, not all troubled companies can be saved, or really, need to be saved. The standard pivot model just doesn't work on most businesses, while deferred investment and cash flow problems are always fatal.