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Estimated enterprise value using discounted cash flow method (Exhibit B.4) Absolute priority rule, 19, 192 Academic research bankruptcy costs, 18 bankruptcy resolution, 19 carve-outs, 235 18-19 tracking stock, 235 Accounting for employee benefits, 329-332 Adamson, James, 116, 125-126 Adjusted present value (APV) method, 491-495, 500-504 Administrative bankruptcy costs, 212, 248 Aeromexico, 93 Agency costs, 486-487 Air Canada Air Partners, 91-95, 194 Allegheny International, 210-211, 224...

Alphatec m Distress

In 1995, coinciding with a general slowdown in the global semiconductor industry, ATEC's profit fell by 35 percent, from 699 million baht to 452 million baht. (Historical financial statements appear in Exhibit 5.3.) The Group came under increasing pressure to raise new financing. The initial phases of investment in AlphaTechnopolis and the Submicron wafer fabrication plant had required large infusions of cash. However, businesses that could have provided positive cash flow for investment were...

Stock Prices and Long Run Performance

Aharony, Jones, and Swary 1980 show that when firms file for bankruptcy, their common stock prices decline significantly, on average controlling for differences in firms' risk and market movements . Moreover, for up to five years before they enter bankruptcy, firms' stock prices significantly underperform the market. Gilson, John, and Lang 1990 document that when distressed firms successfully restructure their debt out of court, their risk-adjusted stock prices increase by over 40 percent, on...

Prepackaging ft Chapter

In early December 1996 Flagstar began discussions with the investment banking firm Donaldson, Lufkin amp Jenrette about possible restructurings, and DLJ submitted an initial restructuring proposal to Flagstar on December 23. It involved pursuing a prepackaged Chapter 11 bankruptcy reorganization. In a prepackaged Chapter 11, or prepack, the firm simultaneously files for bankruptcy and files a reorganization plan with the court. The requirements for voting on and confirming a prepack Chapter 11...

Humana Inc Post Spin Capital Structure

In late June of 1992, David Jones chairman and chief executive officer CEO of Humana Inc. stood looking out the window of his downtown Louisville, Kentucky, office and considered how rapidly events had unfolded over the past year. As the nation's largest integrated health care provider, Humana operated eighty-one acute-care hospitals in nineteen U.S. states, England, and Switzerland, and offered a broad range of managed health care plans to approximately 1.7 million individuals, mainly through...

Participants In The Reorganization

Pete Van Horn knew that each class of claimants would examine the projections with a microscope to anticipate the effect they would have on the nature of the offer that would be made to each class. In his mind, there were four principal classes.3 1. Secured Claims. These included claims secured by a range of assets, including real estate and inventories. While the particular security of each claim was often different, Van Horn thought that as a first approximation it was possible to treat these...