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Neiman Marcus: A Restructuring Case Study

Mercer Capital is a national valuation and financial/transaction advisory firm. The Neiman Marcus Chapter 11 bankruptcy filing raises multiple valuation questions:

• Fraudulent conveyance (asset stripping) and solvency related to pre-filing asset distributions
• Liquidation vs going concern value
• Value of the company once it emerges from Chapter 11
• Allocation of enterprise value to secured and unsecured creditors
• Fresh start accounting

Neiman Marcus Group, Inc. (“Neiman Marcus” or “Company”) is a Dallas, Texas-based holding company that operates four retail brands: Neiman Marcus, Bergdorf Goodman, Last Call (clearance centers), and Horchow (home furnishings). Unlike other department store chains, such as JCPenney and Macys that cater to the mass market, Neiman Marcus’s target market is the top 2% of U.S. earners.

Among the notable developments over the last 15 years were two private equity transactions that burdened the Company with a significant debt load and one well-timed acquisition. The debt and acquisition figured prominently in the May 7, 2020 bankruptcy filing in which the company sought to reorganize under Chapter 11 with the backing of most creditors.

Iconic Luxury Retailer to Indebted Morass

The iconic Neiman Marcus department store was established in 1907 in Dallas. Over the ensuing decades, the Company prospered as oil wealth in Texas fueled demand for luxury goods. Neiman Marcus merged with Broadway-Hale Stores (later rechristened Carter Hawley Hale Stores, Inc.) in the late 1960s. Additional stores were opened outside of Texas in Atlanta, South Florida, and other wealthy enclaves around the U.S. except for New York where Bergdorf Goodman (acquired in the 1970s) operated two stores.

In 1987, Neiman Marcus along with Bergdorf Goodman was partially spun out as a public company with the remaining shares spun in 1999.

In 2005, the Company was acquired via a $5 billion LBO that was engineered by Texas Pacific Group and Warburg Pincus.  Once the economy rebounded sufficiently from the Great Financial Crisis, the PE-owners reportedly sought to exit via an IPO in 2013. However, the IPO never occurred. Instead, the Company was acquired for $6 billion by Ares Management and the Canada Pension Plan Investment Board (“CPPIB”).

In 2014 Neiman Marcus acquired MyTheresa, a German luxury e-commerce retailer with annual revenues of $130 million, for $182 million of cash consideration. During 2018, the entity that held the shares of MyTheresa (MyT Holding Co.) was transferred via a series of dividends to the Neiman Marcus holding company directly controlled by Ares and CPPIB and thereby placed the interest out of the reach of Company creditors.

Neiman Marcus filed an S-1 in 2015 in anticipation of becoming a public company again; however, the registration statement was withdrawn due to weak investor demand.

Although Neiman Marcus’ common shares had not been publicly traded since 2005, the Company filed with the SEC because its debt was registered. During June 2019, the Company deregistered upon an exchange of new notes and preferred equity for the registered notes. S&P described the restructuring as a selective default because debt investors received less than promised with the original securities.

Review of Financials

Figure 1 below presents a recent summary of the company’s financial performance and position one year prior to the bankruptcy filing. Of note is the extremely high debt burden that equated to 12.4x earnings before interest taxes, depreciation, and amortization (“EBITDA”) for the last twelve months (“LTM”) ended April 27, 2019. Although definitions vary by industry, federal banking regulators consider a company to be “highly levered” if debt exceeds EBITDA by 6x.

Moody’s downgraded the Company’s corporate credit rating to B3 from B2 in October 2013 with the acquisition by Ares and CPPIB. Moody’s also established an initial rating of Caa2 for unsecured notes issued to partially finance the acquisition. By the time the notes were deregistered, Moody’s had reduced the corporate rating to Caa3 and the notes to Ca.

Moody’s defines Caa as obligations that “are judged to be of poor standing and are subject to very high credit risk,” and Ca as obligations that are “highly speculative and are likely in, or very near, default, with some prospect of recovery in principal and interest.”

Neiman Marcus has struggled with a high debt load since the first LBO in 2005, which has been magnified by the disruptive impact that online retailing has had on department stores.  EBITDA declined from $665 million in FY2015 to $400 million in the LTM period ended April 27, 2019; the EBITDA margin declined by over a third from 13.1% to 8.5%, over the same time. By April 2019, debt equated to 12.4x LTM EBITDA and covered interest expense by 1.2x.

By way of reference, the debt/EBITDA and EBITDA/interest ratios for Ralph Lauren (NYSE: RL) for the fiscal year ended March 30, 2019, were 1.0x and 47.1x, while the respective ratios for Dillard’s (NYSE: DDS) were 1.2x and 9.9x for the fiscal year ended February 2, 2019.

At the time of bankruptcy, Neiman Marcus generated about one-third of its sales (about $1.5 billion) online. MyTheresa generated approximately $500 million of this up from $238 million in 1Q17 when certain subsidiaries that held MyTheresa were designated “unrestricted subsidiaries” by the Company. While MyTheresa’s sales increased, the legacy department store business declined as the Company struggled to connect with younger affluent customers who favored online start-up boutiques and had little inclination to shop in a department store.

As shown in the chart below , ecommerce sales as a portion of total retail sales have doubled over the last five years to about 12% in 2019. The move to work from home (“WFH”) and social distancing practices born of COVID-19 in early 2020 have accelerated the trend such that the pre-COVID-19 projection of e-commerce sales rising to 15% by 2020 will likely prove to be significantly conservative.

Bankruptcy Filing

Neiman Marcus filed on May 7, 2020 for chapter 11 bankruptcy protection. The COVID-19 induced shutdown of the economy was the final nail in the coffin, which forced major furloughs and the closing of its stores in accordance with various local shelter-in-place regulations.  Other recent retail bankruptcies include Lord & Taylor, Men’s Warehouse, Ann Taylor, Brooks Brothers, Lucky Brands, J. Crew with many more expected to file.

The initial plan called for creditors to convert $4 billion of $5 billion of debt into equity. The plan does not provide for mass store closures or asset sales, although the Last Call clearance stores will close.

As noted, the bankruptcy filing follows a restructuring in June 2019 that entailed:

• An exchange of all but $137 million of $960 million of 8.0% cash pay and $656 million of 8.75%/9.50% PIK Toggle unsecured notes for $1.2 billion of (i) 8.0% and 8.75% third lien Company notes and (ii) $250 million of Series A preferred equity in MyT Holding Co., a US-based entity that holds the German corporate entity that operates MyTheresa;
• The issuance of $550 million of new second-lien 6% cash pay/8.0% PIK notes due 2024 with a limited senior secured claim of $200 million from MyT Holding Co. and other MyT affiliates;
• A partial paydown of the first-lien term loan facility at par with the proceeds of the second lien notes; and
• An exchange for the remaining $2.2 billion first-lien credit facility with a new facility and an extension of the maturity to October 2023.

The restructuring did not (apparently) materially impact the Company’s $900 million asset-based credit facility of which $455 million was drawn as of April 2019; or the first lien $125 million debentures due in 2028.

As shown in Figure 4, market participants assigned little value to the $1.2 billion of third lien notes that were trading for around 8% of par when the bankruptcy filing occurred and 6% of par in late August 2020.

The binding Restructuring Support Agreement (“RSA”), dated May 7, 2020, included commitments from holders of 99% of the Company’s term loans, 100% of the second line notes, 70% of the third line notes, and 78% of the residual unsecured debentures to equitize their debt.  Also, certain creditors agreed to backstop $675 million in debtor-in-possession (“DIP”) financing and to provide $750 million of exit financing which would be used to refinance the DIP facility and provide incremental liquidity.

DIP financing is often critical to maintain operations during the bankruptcy process when the company has little cash on hand. DIP financing is typically secured by the assets of the company and can rank above the payment rights of existing secured lenders. DIPs often take the form of an asset-based loan, where the amount a company borrows is based on the liquidation value of the inventory, assuring that if the company is unable to restructure, the loan can be repaid from the liquidation of the retailer’s assets.

Bankruptcy Path: Chapter 7 vs. Chapter 11

Federal law governs the bankruptcy process. Broadly, a company will either reorganize under Chapter 11 or liquidate under Chapter 7.

A Chapter 7 filing typically is made when a business has an exceedingly large debt combined with underlying operations that have deteriorated such that a reorganized business has little value. Under Chapter 7, the company stops all operations. A U.S. bankruptcy court will appoint a trustee to oversee the liquidation of assets with the proceeds used to pay creditors after legal and administrative costs are covered. Unresolved debts are then “discharged”, and the corporate entity is dissolved.

Under Chapter 11, the business continues to operate, often with the same management and board who will exert some control over the process as “debtor in possession” operators. Once a Chapter 11 filing occurs, the debtor must obtain approval from the bankruptcy court for most decisions related to asset sales, financings, and the like.

Most public companies and substantive private ones such as Neiman Marcus file under Chapter 11.  If successful, the company emerges with a manageable debt load and new owners. If unsuccessful, then creditors will move to have the petition dismissed or convert to Chapter 7 to liquidate.

Most Chapter 11 filings are voluntary, but sometimes creditors can force an involuntary filing. Normally, a debtor has four months after filing to propose a reorganization plan. Once the exclusivity period ends creditors can propose a competing plan.

Usually, the debtor continues to operate the business; however, sometimes the bankruptcy court will appoint a trustee to oversee the business if the court finds cause to do so related to fraud, perceived mismanagement and other forms of malfeasance.

The U.S. Trustee, the bankruptcy arm of the Justice Department, will appoint one or more committees to represent the interests of the creditors and stockholders in working with the company to develop a plan of reorganization. The trustee usually appoints the following:

• The “official committee of unsecured creditors”
• Other creditors committee representing a distinct class of creditors such as secured creditors or subordinated bond holders; and
• Stockholders committee.

Once an agreement is reached it must be confirmed by the court in accordance with the Bankruptcy Code before it can be implemented. Even if creditors (and sometimes stockholders) vote to reject the plan, the court can disregard the vote and confirm the plan if it believes the parties are treated fairly.

Neiman Marcus pursued a “ prepackaged ” or “ prepack ” Chapter 11 in which the company obtained support of over two-thirds of its creditors to reorganize before filing. Under the plan, the Company would eliminate about $4 billion of $5.5 billion of debt. The creditors also committed a $675 million DIP facility that will be replaced with a $750 million facility once the plan is confirmed by the court.

The Role of Valuation in Bankruptcy

Valuation issues are interwound in bankruptcy proceedings, especially in Chapter 11 filings when a company seeks to reorganize. Creditors and the debtor will hire legal and financial advisors to develop a reorganization plan that maximizes value and produces a reorganized company that has a reasonable likelihood of producing sufficient cash flows to cover its obligations.

There are typically three valuation considerations for companies restructuring through Chapter 11 Bankruptcy.

• Companies must prove that a Chapter 11 Restructuring is in the “best interest” of its stakeholders;
• A cash flow test must prove that post-reorganization the debtor will be able to fund obligations; and,
• “Fresh Start Accounting” must be adopted in which the balance sheet is restated to fair value.

Sometimes as is the case with Neiman Marcus there is a fourth valuation-related issue that deals with certain transactions that may render a company insolvent.

Fraudulent Conveyance

A side story to Neiman Marcus relates to the 2018 transaction in which the shares of MyTheresa were transferred in 2018 to bankruptcy-remote affiliates of PE owners Ares and CPPIB. Under U.S. bankruptcy law, transferring assets from an insolvent company is a fraudulent transaction.

During 2017, Neiman Marcus publicly declared the subsidiaries that held the shares were “unrestricted subsidiaries.” Once the distribution occurred in September 2018, creditors litigated the transaction. All but one (Marble Ridge) settled in 2019 as part of the previously described debt restructuring.

Since the bankruptcy filing occurred, the unsecured creditors commissioned a valuation expert to review the transaction to determine whether Neiman Marcus was solvent as of the declaration date, immediately prior to the distribution and after the distribution. As shown in Figure 5, the creditors’ expert derived a negative equity value on all dates. If the court accepted the position, then presumably Ares and CPPIB would be liable for fraudulent conveyance.

At the time the distribution occurred, Neiman Marcus put forth an enterprise valuation of $7 billion and relied upon the opinion of two national law firms that it was within its rights to execute the transaction. Since filing, the PE owners have commissioned one or more valuation experts whose opinion has not been disclosed.

On July 31, 2020, the committee of unsecured creditors and the Company reached a settlement related to the fraudulent conveyance claims arising from the MyTheresa transaction. Ares and CPPIB agreed to contribute 140 million MyTheresa Series B preferred shares, which represent 56% of the B class shares, to a trust for the benefit of the unsecured creditors. The Company also agreed to contribute $10 million cash to the trust. A range of value for the series B shares of $0 to $275 million was assigned in a revised disclosure statement filed with the bankruptcy court.

Marble Ridge, which served on the committee, did not view the settlement as sufficient as was the case in 2019 when it did not participate in the note exchange as part of the 2018 litigation settlement.

During August, it became known that Marble Ridge founder Dan Kamensky pressured investment bank Jeffrey’s not to make a bid for the shares that were to be placed in a trust because it planned to bid, too (reportedly 20 cents per share compared to 30 cents or higher by Jeffrey’s). The anti-competitive action was alleged to have cost creditors upwards of $50 million. Marble Ridge subsequently resigned from the creditors committee and announced plans to close the fund. Kamensky was arrested on September 7 th and charged with securities fraud, extortion, wire fraud, extortion, and obstruction of justice, according to the U.S. Attorney’s Office for the Southern District of New York.

Best Interest Test

A best interest test must show that the reorganization value is higher than the liquidation value of the company, to ensure that the creditors in Chapter 11 receive at least as much under the restructuring plan as they would in a Chapter 7 liquidation.

In the case of Neiman Marcus, the liquidation vs. reorganization valuation analysis was a formality because most unsecured creditors and the Company agreed to a prepackaged plan subject to resolution of such items as the MyTheresa shares. Nonetheless, we summarize both for illustration purposes.

Liquidation Analysis

A rough calculation of Neiman Marcus’ liquidation value is included below, based on balance sheet data from April 2019 as these are the most current figures available.

Substantial value in a liquidation analysis depends upon what an investor would be willing to pay for the rights to the Neiman Marcus name as well as its customer lists and proprietary IP code. The recovery ratio applied to Neiman Marcus’ inventory is higher than expected recovery ratios across the broader apparel industry since much of Neiman’s inventory is designer goods. Nonetheless, the analysis implies creditors would face a significant haircut in a Chapter 7 liquidation scenario.

Reorganization (Going Concern) Analysis

The reorganization value represents the value of the company once it has emerged as a going concern from Chapter 11 bankruptcy. Typically, the analysis will develop a range of value based upon (i) Discounted Cash Flow (“DCF”) Method; (ii) Guideline Public Company Method; and (iii) Guideline Transaction Method.

Both guideline methods develop public company and M&A “comps” to derive representative multiples to apply to the subject company’s earnings and cash flow.  Market participants tend to focus on enterprise value (market value of equity and debt net of cash) in relation to EBITDA. Secondary multiples include enterprise value in relation to EBIT, EBIT less ongoing Capex, and revenues.

As it relates to Neiman Marcus, we note that Lazard Freres & Co. (“Lazard”) as financial advisor focused on adjusted EBITDA for the LTM period ended February 1, 2020 and the projected 12 months ended February 1, 2022. In doing so, Lazard looked past 2020 and 2021 as excessively abnormal years due to the COVID19 induced recession. Our observation is that this treatment (for now) is largely consistent with how many market participants are treating various earning power measures in industries that were severely impacted by the downturn.

A DCF analysis for Neiman Marcus that assumes the Company emerges from bankruptcy in the fall of 2020 will incorporate the impact of the adverse economy as reflected in presumably subpar operating performance in the first year or two of the projections. More generally, the DCF method involves three key inputs: the forecast of expected future cash flows, terminal value, and discount rate.

• Forecast of Expected Future Cash Flows: Valuation practitioners typically develop cash flow forecasts for specific periods of time, ranging anywhere from three to ten years, or as many periods as necessary until a stable cash flow stream can be realized. Key elements of the forecast include projected revenue growth, gross margins, operating costs, and working capital and capital expenditure requirements. Data from other publicly traded companies within similar lines of business can serve as good reference points for the evaluation of each element in the forecast.
• Terminal Value: The terminal value represents all cash flow values outside of the discrete forecast period. This value is calculated through capitalizing cash-flow at the end of the forecast period, based on expectations of long-term cash flow growth rate and discount rate. Alternatively, a terminal value can be determined through the application of projected or current market multiples.
• Discount Rate: The discount rate is essential in estimating the present value of forecasted cash flows. A proper discount rate is developed from assumptions about costs of equity and debt capital, and capital structure of the new entity. For costs of equity capital, a build-up method is used with long-term risk-free rate, equity premia, and other industry/company-specific factors as inputs. Cost of debt capital and new capital structure can be based on benchmark rates or comparable corporations. The discount rate should reflect the financial risks that come with the projected cash flows of the restructured entity.

The sum of the present values of all forecasted cash flows indicates the enterprise value of the emerging company for a set of forecast assumptions. Reorganization value is the total sum of expected business enterprise value and proceeds from the sale or disposal of assets during the reorganization.

Cash Flow Test

The second valuation hurdle Neiman Marcus will have to jump is a cash flow test. The cash flow test determines the feasibility of the reorganization plan and the solvency of future operations. Since a discounted cash flow analysis is typically used to determine reorganization value, the projected cash flows from this analysis are compared to future interest and principal payments due.

Additionally, the cash flow test details the impact of cash flows on the balance sheet of the restructured entity, entailing modeling changes in the asset base and in the debt obligations of and equity interests in the company. Therefore, the DCF valuation and cash flow tests go together because the amount of debt that is converted to equity creates cash flow capacity to service the remaining debt. If the cash flow model suggests solvent operations for the foreseeable future, the reorganization plan is typically considered viable.

Fresh-Start Accounting

When emerging from bankruptcy in the case of going concern, fresh-start accounting could be required to allot a portion of the reorganization value to specific intangible assets. The fair value measurement of these assets requires the use of multi-period excess earnings method or other techniques of purchase price allocations.

Neiman Marcus plans to eliminate about $4 billion of over $5 billion of debt and $200 million of annual interest expense in a reorganization plan that was approved by U.S. bankruptcy judge David Jones in early September. The plan will transfer the bulk of ownership to the first lien creditors, including PIMCO, Davidson Kempner Capital Management and Sixth Street Partners. PIMCO will be the largest shareholder with three of seven board seats.

Other creditors will receive, in effect, a few pennies to upwards of one-third of what they were owed depending in part on the value of MyTheresa Class B preferred shares that were contributed to a trust for the benefit of unsecured creditors. Also, the Company’s term loan lenders, second lien and third lien note holders waived their right to assert deficiency claims and thereby eliminated upwards of $3.3 billion of additional claims in the general unsecured claims pool (now limited to $340 to $435 million).

Lazard estimated the value of the reorganized Company upon exit from bankruptcy to approximate $2.0 billion to $2.5 billion on an enterprise basis with the equity valued at $800 million to $1.3 billion.

Creditors and the Company negotiated a plan that has presumably maximized (or nearly so) value to each creditor class based upon the priority of their claims. We are not privy to the analysis each class produced and how their views of the analyses, relative negotiating strength and the like drove the settlement.

Ultimately, the performance of the reorganized Neiman Marcus will determine the eventual amount recovered by creditors to the extent shares are not sold immediately. Some creditors would be expected to sell the shares immediately, while others who have flexibility to hold equity interests and have a favorable view of the reorganized company’s prospects may wait to potentially realize a greater recovery.

In Figure 9 we have constructed a waterfall analysis which we compare with the actual settlement. We assume a range of enterprise values based upon multiples of projected FY22 EBITDA, or $342 million, and compare the residual equity after each claimant class is settled to provide perspective on the creditors’ recovery.

This waterfall implies that class 5 through 7 debt, which for our purposes here is more or less pari passu, should receive the bulk if not all of the equity given $2.4 billion of debt owed to the three classes. Because ~10% of the equity was allocated to subordinated creditors, the senior lenders may have been willing to cede some ownership in order to reach a settlement more quickly.

Per the settlement, ~90% of the equity was allocated to the 2019 senior secured term loan (~$2.3 billion; 87.5%), 2013 residual senior secured loan ($13 million) and first lien debentures ($129 million; 2.8%).

Recovery for the 2019 senior secured creditors was estimated in the Disclosure Statement to approximate 33% compared to about 19% for the first lien debentures.

Interests in MyTheresa also impacted projected recoveries for the junior and unsecured creditors, a byproduct of the litigation to settle the fraudulent conveyance claims related to the 2018 transaction.

The second lien noteholders ($606 million) would obtain (i) 1.0% equity interest; (ii) seven-year warrants to purchase up to 25% of the reorganized equity at an agreed upon strike price; (iii) participation rights in the exit loan and associated fees; and (iv) an economic interest in MyTheresa in the form of $200 million of 7.5% PIK notes.

The disclosure statement indicates the recovery equates to less than 2% of what is owed to the second lien note holders, which appears to exclude whatever value is attributable to the PIK notes because 1% of the Newco equity would equate to $800 thousand to $1.3 million of value based upon a range of equity value of $800 million to $1.3 billion. 1

The third lien noteholders ($1.3 billion) would obtain (i) 8.5% equity interest; (ii) participation rights in the exit loan and associated fees; and (iii) a 50% economic and 49.9% voting interest in the common equity of MyTheresa.

The disclosure statement indicates the recovery to be 5.6% of the claim, which also appears to exclude the value of the MyTheresa common shares if the equity interest is equal to $68 million to $110 million based upon an aggregate equity value of $800 million to $1.3 billion.

The issuance of $200 million of PIK notes and transfer of 50% of the common equity interest in MyTheresa to the second and third lien noteholders appears to be a result of the 2019 debt restructuring and settlement of the 2018 litigation surrounding the 2018 transfer of MyTheresa to the parent company and out of the reach of creditors.

The final wrinkle in the disputed MyTheresa saga involved an agreement reached in late July 2020 in which Ares and CPPIB agreed to allocate 140 million (56%) MyTheresa Series B preferred shares to a trust established for unsecured creditors. Neiman Marcus as debtor also agreed to contribute $10 million cash to the trust.

At the time the settlement was announced in late July, the value attributed to the preferred shares was $162 million; however, the August 3 Disclosure Statement assigned a range of value of $0 to $275 million. Marble Ridge reportedly had planned to bid 20 cents per share to provide certain unsecured creditors (e.g. unpaid vendors) immediate liquidity before the fracas with Jeffrey’s occurred.

Neiman Marcus emerged from Chapter 11 by September 30, 2020 in a streamlined process via the prepackaged negotiations that will leave the Company with significantly less debt in its capital structure.  As outlined in this article, valuation is an important factor in the bankruptcy process.

1 The issuance of $200 million of PIK notes and transfer of 50% of the common equity interest in MyTheresa to the second and third lien noteholders appears to be a result of the 2019 debt restructuring and settlement of the 2018 litigation surrounding the 2018 transfer of MyTheresa to the parent company and out of the reach of creditors.

2 The projected 1.4% recovery rate for the second lien notes apparently excludes the MyTheresa PIK notes, while the projected 5.6% recovery rate for the third lien notes likewise appears to exclude the 50% common equity interest in MyTheresa.

About the Author

Jeff k. davis.

Jeff K. Davis is the Managing Director of Mercer Capital’s Financial Institutions Group. The Financial Institutions Group works with banks, thrifts, asset managers, insurance companies and agencies, BDCs, REITs, broker-dealers and financial technology companies. Prior to ...

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Stuart C. Gilson

Steven r. fenster professor of business administration.

Professor Stuart Gilson is the Steven R. Fenster Professor of Business Administration at Harvard Business School, and former chairman of the Finance Unit.  His research, teaching, and consulting focuses on the financial, business, and legal strategies that companies use to revitalize their business, improve performance, and create value when facing significant financial and operating challenges.  He is an expert on corporate restructuring, valuation, business bankruptcy, credit analysis, and financial strategy.

Professor Gilson’s research has been published by leading academic and practitioner journals and has been cited by the national news media, including The Wall Street Journal, The New York Times, Business Week, The Economist, and Bloomberg.  His work has received numerous honors, including the prestigious Graham and Dodd Award for his article on investment strategies used by hedge funds to acquire control of distressed companies. He has also written more than sixty HBS case studies that are used in business schools around the world.  His best-selling book,   Creating Value Through Corporate Restructuring :  Case Studies in Bankruptcies, Buyouts, and Breakups (John-Wiley), is now in its second edition.

He is the recipient of the Charles M. Williams award in recognition of outstanding teaching in executive education at Harvard Business School.  He currently teaches in the Advanced Management Program (AMP) and various other executive programs including YPO/WPO and Finance For Senior Executives.  For twenty years he taught one of the most popular MBA courses at HBS, Creating Value Through Corporate Restructuring.

Professor Gilson consults for a variety of companies and organizations.  He is a director of Advanced Alloy Processing LLC, and served on the advisory boards of the Turnaround Management Association and several investment funds.  He provides expert testimony in corporate litigation, and is an academic affiliate of Cornerstone Research, a leading economic consulting firm.  He also teaches Finance in custom executive training programs that he designs for individual client companies.

From the publisher:  Stuart Gilson is one of the leading corporate restructuring experts in the United States, teaching thousands of students and consulting with numerous companies. Now, in the second edition of this bestselling book, Gilson returns to present new insight into the corporate restructuring process.  Through real-world case studies that involve some of the most prominent restructurings of the last ten years, and highlighting the increased role of hedge funds in distressed investing, you'll develop a better sense of the restructuring process and how it can truly create value.  Topics covered include corporate bankruptcy reorganization, debt workouts, distressed debt investing strategies, equity spin-offs, asset divestitures, employee layoffs, and corporate downsizing.  Integrative chapters address how value should be estimated and allocated, and when a corporation should "pull the trigger."  Cases include Delphi and General Motors, the Finova Group and Warren Buffett, Kmart and Sears, Adelphia Communications, Seagate Technology, Dupont-Conoco, and the Eurotunnel debt restructuring.  From hedge funds to financial fraud to subprime busts, this second edition offers a rare look at some of the most innovative and controversial restructurings ever.

The use of M&A in bankruptcy has increased dramatically in recent years, leading to concerns that the Chapter 11 process has shifted toward excessive liquidation of viable firms. In this paper, we argue that the rise of M&A has blurred traditional distinctions between “reorganization” and “liquidation”. We examine the drivers of M&A activity, based on factors specific to Chapter 11 as well as more general factors that drive M&A waves for non-distressed firms. M&A in bankruptcy is counter-cyclical, and is more likely when the costs of financing a reorganization are greater than financing costs to a potential acquirer. Consistent with a senior creditor liquidation bias, the greater use of secured debt leads to more sales in bankruptcy – but, this result holds only for sales that preserve going concern value. We also show that overall creditor recovery rates are higher, and unsecured creditor recoveries and post-bankruptcy survival rates are not different, when bankrupt firms sell businesses as going concerns.

During the recent financial crisis, U.S. bankruptcy courts and debt restructuring practitioners were faced with the largest wave of corporate defaults and bankruptcies in history. In 2008 and 2009, $1.8 trillion worth of public company assets entered Chapter 11 bankruptcy protection - almost 20 times the amount during the prior two years. And the portfolio companies of U.S. private equity firms faced a towering wall of debt that, many observers predicted, was about to wipe out most of the industry. But far from the death of private equity or a severe contraction of corporate America, the past three years have seen an astonishingly rapid working off of U.S. corporate debt overhang, allowing corporate profits and values to rebound with remarkable speed and vigor. And as Professor Gilson argues, corporate America's recovery from the recent financial crisis provides a clear demonstration of the importance of U.S. bankruptcy laws and restructuring practices in maintaining the competitiveness of U.S. companies and the long run growth of the U.S. economy.

(With Kristin Mugford) Set in 2013, School Specialty was a financially troubled supplier of educational products to primary and secondary schools in the United States. The company planned to file Chapter 11 in order to address its excessive debt load, but needed to arrange debtor-in-possession financing to provide liquidity while in bankruptcy. The company has received a financing proposal from its existing term loan lender that includes some aggressive and unusual features. This includes the requirement that, immediately upon filing for Chapter 11, School Specialty undertake to sell its assets under Section 363 of the U.S. Bankruptcy Code. The Company must decide whether to accept this proposal, and what other options may be available.

One of the world's leading investors in distressed companies, Oaktree Capital Management, is contemplating a "loan to own" investment in the debt of Countrywide plc, a financially troubled residential real estate agent based in the U.K. Only sixteen months earlier, Countrywide was acquired by private equity investor Apollo Management L.P. in a leveraged buyout. Although Countrywide is the largest real estate agent in the U.K., and has a strong portfolio of assets, its economic fortunes have declined suddenly with the widespread collapse of global financial and real estate markets, putting it in danger of defaulting on its debt and having to restructure under a U.K. Scheme of Arrangement.

Hit with an industry recession and the global financial crisis of 2008, in January 2009 LyondellBasell Industries AF S.C.A., one of the world's largest internationally diversified chemical companies and headquartered in The Netherlands, placed its U.S. operations and a German subsidiary under U.S. Chapter 11 bankruptcy protection. To successfully reorganize as a going concern, the company sought to raise over $8 billion in a super-priority "Debtor-in-Possession (DIP)" loan from a group of thirteen financial institutions, including commercial banks, investment banks, hedge funds, and private equity funds. Representing one of the largest DIP loans in history, this financing was considered critical to the company's survival. One unique and controversial feature of the financing was a $3.25 billion 'Roll-Up" facility, under which a number of Lyondell's pre-bankruptcy lenders were allowed to significantly elevate the priority of debts they were already owed (so that they ranked ahead of all other pre-bankruptcy debts owed by the company), provided the lenders advanced new loans to the company to help finance its restructuring. With a costly liquidation as the alternative, various creditor groups objected to the DIP financing package, putting Lyondell's reorganization, and survival as a going concern, at significant risk.

A manufacturer of building products and specialty chemicals, W. R. Grace & Co. filed for Chapter 11 bankruptcy in response to a flood of lawsuits alleging that its products contained asbestos, and had caused hundreds of thousands of people to contract asbestos-related diseases such as mesothelioma and lung cancer. Nine years later, Grace is poised to emerge from bankruptcy with a plan of reorganization that provides for the establishment of two special purpose trusts through which all current and future asbestos claims will be channeled, allowing the company to survive as an ongoing business. However, the company and asbestos claimholders' committees materially disagree over the size of the company's liability for asbestos, and have hired experts to value the liability. Grace's expert argues the liability is worth between $83 million and $173 million, while the plaintiff's expert argues the liability could be as high as $6.2 billion.

(With Emilie Feldman and Belen Villalonga) This article investigates how securities analysts help investors understand the value of diversification. By studying the research that analysts produce about companies that have announced corporate spin-offs, we gain unique insights into how analysts portray diversified firms to the investment community. We find that while analysts' research about these companies is associated with improved forecast accuracy, the value of their research about the spun-off subsidiaries is more limited. For both diversified firms and their spun-off subsidiaries, analysts' research is more valuable when information asymmetry between the management of these entities and investors is higher. These findings contribute to the corporate strategy literature by shedding light on the roots of the diversification discount and by showing how analysts' research enables investors to overcome asymmetric information.

• Gilson, Stuart C. Creating Value through Corporate Restructuring: Case Studies in Bankruptcies, Buyouts, and Breakups . 2nd ed. John Wiley & Sons, 2010.  View Details
• Gilson, Stuart C. Creating Value through Corporate Restructuring: Case Studies in Bankruptcies, Buyouts, and Breakups . John Wiley & Sons, 2001.  View Details
• Gilson, Stuart C. "Coming Through in a Crisis: How Chapter 11 and the Debt Restructuring Industry Are Helping to Revive the U.S. Economy." Journal of Applied Corporate Finance 24, no. 4 (Fall 2012): 23–35.  View Details
• Feldman, Emilie, Stuart C. Gilson, and Belen Villalonga. "Do Analysts Add Value When They Most Can? Evidence from Corporate Spinoffs." Strategic Management Journal 35, no. 10 (October 2014): 1446–1463. (Winner, "Distinguished Paper Award," 2012 Academy of Management Meetings (Business Policy & Strategy Division.))  View Details
• Bower, Joseph L., and Stuart C. Gilson. "The Social Cost of Fraud and Bankruptcy." Harvard Business Review 81, no. 12 (December 2003): 20–22.  View Details
• Gilson, Stuart C., Paul M. Healy, Christopher F. Noe, and Krishna G. Palepu. "Analyst Specialization and Conglomerate Stock Breakups." Journal of Accounting Research 39, no. 3 (December 2001).  View Details
• Gilson, S. C. "Analysts and Information Gaps: Lessons From the UAL Buyout." Financial Analysts Journal 56, no. 6 (November–December 2000): 82–110.  View Details
• Gilson, S. C., E. S. Hotchkiss, and R. S. Ruback. "Valuation of Bankrupt Firms." Review of Financial Studies 13, no. 1 (Spring 2000): 43–74. (Abridged version reprinted in The Journal of Corporate Renewal 13, no. 7 (July 2000))  View Details
• Gilson, S. C. "Transactions Costs and Capital Structure Choice: Evidence from Financially Distressed Firms." Journal of Finance 52, no. 1 (March 1997): 161–196. (Abstracted in Contemporary Finance Digest 1 (autumn 1997))  View Details
• Gilson, S. C., H. DeAngelo, and L. DeAngelo. "Perceptions and the Politics of Finance: Junk Bonds and the Regulatory Seizure of First Capital Life." Journal of Financial Economics 41, no. 3 (July 1996): 475–511.  View Details
• Gilson, S. C. "Investing in Distressed Situations: A Market Survey." Security Analysts Journal (published)  View Details
• Gilson, S. C. "Investing in Distressed Situations: A Market Survey." Financial Analysts Journal 51, no. 6 (November–December 1995): 8–27.  View Details
• Gilson, S. C., and M. R. Vetsuypens. "Creditor Control in Financially Distressed Firms: The Empirical Evidence." Corporate Practice Commentator 37 (1995): 339–361.  View Details
• Gilson, S. C., and M. R. Vetsuypens. "Creditor Control in Financially Distressed Firms: The Empirical Evidence." Washington University Law Quarterly 72 (fall 1994): 1005–1025.  View Details
• Gilson, S. C., H. DeAngelo, and L. DeAngelo. "The Collapse of First Executive Corporation: Junk Bonds, Adverse Publicity, and the Run on the Bank Phenomenon." Journal of Financial Economics 36, no. 3 (December 1994): 287–336.  View Details
• Gilson, S. C., and M. R. Vetsuypens. "Creating Pay for Performance in Troubled Companies." Journal of Applied Corporate Finance 6, no. 4 (winter 1994): 81–92.  View Details
• Gilson, S. C., and M. R. Vetsuypens. "CEO Compensation in Financially Distressed Firms: An Empirical Analysis." Journal of Finance 48, no. 2 (June 1993): 425–458. (Abstracted in Financial Management Collection 7 (winter 1992) and 9 (fall 1994))  View Details
• Gilson, S. C. "Managing Default: Some Evidence on How Firms Choose between Workouts and Chapter 11." Continental Bank Journal of Applied Corporate Finance 4, no. 2 (summer 1991): 62–70.  View Details
• Gilson, S. C. "Bankruptcy, Boards, Banks, and Blockholders: Evidence on Changes in Corporate Ownership and Control When Firms Default." Journal of Financial Economics 27, no. 2 (October 1990): 355–387.  View Details
• Gilson, S. C., J. Kose, and L. H. P. Kang. "Troubled Debt Restructurings: An Empirical Analysis of Private Reorganization of Firms in Default." Journal of Financial Economics 27, no. 2 (October 1990): 315–353.  View Details
• Gilson, S. C. "Management Turnover and Financial Distress." Journal of Financial Economics 25 (December 1989): 241–262.  View Details
• Gilson, S. C. " Management Turnover and Financial Distress ." In Bankruptcy Anthology , edited by Charles Tabb. Cincinnati: Anderson Publishing Company, 2002.  View Details
• Gilson, S. C., and M. R. Vetsuypens. "Creditor Control in Financially Distressed Firms: The Empirical Evidence." In Bankruptcy Anthology , edited by Charles Tabb. Cincinnati: Anderson Publishing Company, 2002.  View Details
• Gilson, S. C. "Bankruptcy, Boards, Banks, and Blockholders: Evidence on Changes in Corporate Ownership and Control When Firms Default." In Empirical Corporate Finance , edited by Michael J. Brennan. Glos: Edward Elgar Publishing, 2001.  View Details
• Gilson, S. C. "Managing Default: Some Evidence on How Firms Choose between Workouts and Chapter 11." In High Yield Bonds: Market Structure, Valuation, and Portfolio Strategies , edited by T. M. Barnhill, W. F. Maxwell, and M. R. Shenkman. New York: McGraw-Hill, 1999.  View Details
• Gilson, S. C. "Investing in Distresses Situations: A Market Survey." In High Yield Bonds: Market Structure, Valuation, and Portfolio Strategies , edited by T. M. Barnhill, W. F. Maxwell, and M. R. Shenkman. New York: McGraw-Hill, 1999.  View Details
• Gilson, S. C., and M. R. Vetsuypens. "CEO Compensation in Financially Distressed Firms: An Empirical Analysis." In The Economics of Executive Compensation , edited by Kevin Hallock and Kevin Murphy. U.K.: Edward Elgar Publishing, 1999.  View Details
• Gilson, S. C. "Some Methodological Issues in Cross-country Comparisons of Commercial Bankruptcy Law." In International and Comparative Corporate Insolvency Law , edited by J. S. Ziegel. Oxford: Oxford University Press, 1994.  View Details
• Gilson, S. C. "Managing Default: Some Evidence on How Firms Choose between Workouts and Chapter 11." In Corporate Bankruptcy: Economic and Legal Perspectives , edited by J. Bhandari. Cambridge University Press, 1994.  View Details
• Gilson, S. C. "Managing Default: Some Evidence on How Firms Choose between Workouts and Chapter 11." In The New High-Yield Bond Market: Investment Opportunities , edited by J. Lederman and M. Sullivan. Chicago: Probus Publishing Co., 1993.  View Details
• Gilson, S. C. "Managing Default: Some Evidence on How Firms Choose between Workouts and Chapter 11." In The New Corporate Finance: Where Theory Meets Practice , edited by D. Chew. New York: McGraw-Hill, 1993.  View Details
• Gilson, S. C. "Troubled Debt Restructurings: An Empirical Analysis of Private Reorganization of Firms in Default." In Studies in Financial Institutions: Commercial Banks , edited by C. W. Smith and C. James. New York: McGraw-Hill, 1993.  View Details
• Gilson, S. C. "Management Turnover and Financial Distress." In Bankruptcy and Distressed Restructurings: Analytical Issues and Investment Opportunities , edited by Edward I. Altman. New York: Business One Irwin, 1992.  View Details
• Gilson, S. C. "Bankruptcy, Boards, Banks, and Blockholders: Evidence on Changes in Corporate Ownership and Control When Firms Default." In Bankruptcy and Distressed Restructurings: Analytical Issues and Investment Opportunities , edited by Edward I. Altman. New York: Business One Irwin, 1992.  View Details
• Gilson, S. C., J. Kose, and L.H.P. Kang. "Troubled Debt Restructurings: An Empirical Analysis of Private Reorganization of Firms in Default." In Bankruptcy and Distressed Restructurings: Analytical Issues and Investment Opportunities , edited by Edward I. Altman. New York: Business One Irwin, 1992.  View Details
• Gilson, Stuart, Edith Hotchkiss, and Matthew Osborn. "Cashing Out: The Rise of M&A in Bankruptcy." Harvard Business School Working Paper, No. 15-057, January 2015.  View Details
• Feldman, Emilie Rose, Stuart Gilson, and Belen Villalonga. " When Do Analysts Add Value? Evidence from Corporate Spinoffs. " Harvard Business School Working Paper, No. 10-102, May 2010.  View Details
• Gilson, Stuart C., Edith Hotchkiss, and Richard Ruback. "Valuation of Bankrupt Firms." Harvard Business School Working Paper, No. 99-064, December 1998.  View Details
• Gilson, Stuart C., and Jerold Warner. "Junk Bonds, Bank Debt, and Financing Corporate Growth." Harvard Business School Working Paper, No. 98-037, November 1997.  View Details
• Gilson, Stuart C., and Sarah L. Abbott. "Celsius Network Inc.: Fear, Uncertainty, and Doubt in the Brave New World of Crypto Bankruptcy." Harvard Business School Spreadsheet Supplement 224-741, March 2024.  View Details
• Gilson, Stuart C., and Sarah L. Abbott. "Celsius Network Inc.: Fear, Uncertainty, and Doubt in the Brave New World of Crypto Bankruptcy." Harvard Business School Case 224-044, November 2023. (Revised April 2024.)  View Details
• Gilson, Stuart C., and Sarah L. Abbott. "Equity Restructuring at Dell Technologies: Buy Out, Buy Up, Buy In (A)." Harvard Business School Spreadsheet Supplement 224-709, September 2023.  View Details
• Gilson, Stuart C., and Sarah L. Abbott. "Equity Restructuring at Dell Technologies: Buy Out, Buy Up, Buy In (B)." Harvard Business School Supplement 224-006, July 2023. (Revised November 2023.)  View Details
• Gilson, Stuart C., and Sarah L. Abbott. "Equity Restructuring at Dell Technologies: Buy Out, Buy Up, Buy In (A)." Harvard Business School Case 224-005, July 2023. (Revised February 2024.)  View Details
• Antill, Samuel, Stuart Gilson, and Kristin Mugford. "Hertz in Bankruptcy: A Wild Ride in Pandemic Times." Harvard Business School Case 222-064, February 2022. (Revised March 2022.)  View Details
• Gilson, Stuart C. "PG&E and the First Climate Change Bankruptcy." Harvard Business School Spreadsheet Supplement 222-714, April 2022.  View Details
• Gilson, Stuart C., and Sarah L. Abbott. "The Wolf in Cashmere: LVMH's Bid to Acquire Tiffany." Harvard Business School Case 222-054, November 2021.  View Details
• Gilson, Stuart C., and Sarah Abbott. "Carnival Corporation: Cruising Through COVID-19." Harvard Business School Case 221-028, January 2021. (Revised February 2021.)  View Details
• Gilson, Stuart C., and Sarah L. Abbott. "PG&E and the First Climate Change Bankruptcy." Harvard Business School Case 221-057, December 2020. (Revised September 2023.)  View Details
• Gilson, Stuart C., and Sarah L. Abbott. "Constellation Brands' Investment in Canopy Growth: Aiming High." Harvard Business School Case 220-044, November 2019. (Revised February 2020.)  View Details
• Gulati, Ranjay, Stuart C. Gilson, and Aldo Sesia. "BlackRock (B): Acquire MLIM?" Harvard Business School Teaching Note 719-431, October 2018.  View Details
• Gilson, Stuart C., Kristin Mugford, and Sarah L. Abbott. "Sabine Oil & Gas Corporation." Harvard Business School Case 218-004, April 2018. (Revised September 2023.)  View Details
• Gilson, Stuart C., and Sarah L. Abbott. "Tesla: Merging with SolarCity." Harvard Business School Case 218-038, December 2017. (Revised November 2018.)  View Details
• Gilson, Stuart C., and Sarah L. Abbott. "Tesla: Financing Growth." Harvard Business School Case 218-033, December 2017. (Revised November 2018.)  View Details
• Gilson, Stuart C., Esel Çekin, and Sarah L. Abbott. "Turkish Economy Bank and Fortis Bank: Managing a Complex Merger." Harvard Business School Case 218-012, August 2017.  View Details
• Gilson, Stuart C., and Sarah L. Abbott. "Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover." Harvard Business School Spreadsheet Supplement 217-708, April 2017. (Revised October 2023.)  View Details
• Gilson, Stuart C., Kristin Mugford, and Sarah L. Abbott. "The Rise and Fall of Lehman Brothers." Harvard Business School Case 217-041, January 2017. (Revised January 2019.)  View Details
• Gilson, Stuart C., John D. Dionne, and Sarah L. Abbott. "Eastman Kodak Company: Restructuring a Melting Ice Cube." Harvard Business School Spreadsheet Supplement 216-707, April 2016. (Revised February 2017.)  View Details
• Gilson, Stuart C., and Sarah L. Abbott. "Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover." Harvard Business School Case 216-059, March 2016. (Revised October 2023.)  View Details
• Gilson, Stuart C., and Kristin Mugford. "School Specialty, Inc." Harvard Business School Spreadsheet Supplement 216-705, December 2015. (Revised December 2022.) (We will need a quick turnaround on this to include it in a course packet order in the coming week and a half. Thanks!)  View Details
• Gilson, Stuart, Kristin Mugford, and Annelena Lobb. "Bankruptcy in the City of Detroit." Harvard Business School Case 215-070, April 2015. (Revised April 2022.)  View Details
• Gilson, Stuart C., John D. Dionne, and Sarah L. Abbott. "Eastman Kodak Company: Restructuring a Melting Ice Cube." Harvard Business School Case 216-006, August 2015. (Revised October 2023.)  View Details
• Esty, Benjamin C., Stuart C. Gilson, and Aldo Sesia. "Thomas Cook Group on the Brink (A)." Harvard Business School Case 215-008, August 2014. (Revised March 2016.)  View Details
• Gilson, Stuart C., and Kristin Mugford. "School Specialty, Inc." Harvard Business School Case 214-084, February 2014. (Revised March 2022.)  View Details
• Gilson, Stuart C. "Arch Wireless, Inc. (B): Food for Vultures." Harvard Business School Supplement 214-034, November 2013.  View Details
• Segel, Arthur I., and Stuart C. Gilson. "General Growth Properties and Pershing Square Capital Management (TN)." Harvard Business School Teaching Note 213-042, September 2012.  View Details
• Gilson, Stuart C., and Sarah L. Abbott. "W.R. Grace & Co.: Dealing with Asbestos Torts." Harvard Business School Case 213-046, December 2012. (Revised November 2014.)  View Details
• Segel, Arthur I., Stuart C. Gilson, Thomas Edward Follett Langer, Zubin Gopal Malkani, and John Anthony Mascari. "General Growth Properties and Pershing Square Capital Management." Harvard Business School Case 212-109, May 2012. (Revised November 2015.)  View Details
• Gilson, Stuart C., and Sarah L. Abbott. "Countrywide plc (CW)." Harvard Business School Spreadsheet Supplement 211-714, March 2011.  View Details
• Gilson, Stuart C., and Sarah L. Abbott. "Countrywide plc." Harvard Business School Case 211-026, February 2011. (Revised January 2017.)  View Details
• Gilson, Stuart C., and Sarah Abbott. "Houghton Mifflin Harcourt." Harvard Business School Spreadsheet Supplement 211-708, February 2011. (Revised December 2022.)  View Details
• Gilson, Stuart C., and Sarah L. Abbott. "Houghton Mifflin Harcourt." Harvard Business School Case 211-027, January 2011. (Revised July 2019.)  View Details
• Gilson, Stuart C., Vincent Marie Dessain, and Sarah Abbott. "Groupe Eurotunnel S.A. (A)." Harvard Business School Case 209-062, March 2009. (Revised March 2010.)  View Details
• Gilson, Stuart C., and Belen Villalonga. "Adelphia Communications Corp.'s Bankruptcy." Harvard Business School Case 208-071, October 2007. (Revised February 2010.)  View Details
• Gilson, Stuart C., and Sarah Abbott. "Lyondell Chemical Company." Harvard Business School Case 210-001, December 2009. (Revised April 2022.)  View Details
• Gilson, Stuart C., and Gustavo A. Herrero. "Buenos Aires Embotelladora S.A. (BAESA): A South American Restructuring." Harvard Business School Case 202-009, September 2001. (Revised July 2009.)  View Details
• Gilson, Stuart C., Victoria Ivashina, and Sarah Abbott. "Delphi Corp. and the Credit Derivatives Market (A)." Harvard Business School Case 210-002, July 2009. (Revised July 2009.)  View Details
• Gilson, Stuart C., and Sarah L. Abbott. "Restructuring at Delphi Corporation (A)." Harvard Business School Case 208-069, January 2008. (Revised May 2009.)  View Details
• Gilson, Stuart C., and Sarah Abbott. "Kmart and ESL Investments (A)." Harvard Business School Case 209-044, August 2008. (Revised May 2009.)  View Details
• Gilson, Stuart C., and Sarah Abbott. "Kmart and ESL Investments (B): The Sears Merger." Harvard Business School Supplement 209-045, October 2008. (Revised May 2009.)  View Details
• Gilson, Stuart C., and Belen Villalonga. "Adelphia Communications Corp.'s Bankruptcy (TN)." Harvard Business School Teaching Note 209-020, March 2009. (Revised May 2009.)  View Details
• Gilson, Stuart C. "Note on the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA)." Harvard Business School Background Note 209-133, March 2009.  View Details
• Gilson, Stuart C., Vincent Marie Dessain, and Sarah Abbott. "Groupe Eurotunnel S.A. (B): Restructuring Under the Procedure de Sauvegarde." Harvard Business School Supplement 209-113, March 2009.  View Details
• Gilson, Stuart C., and Belen Villalonga. "Adelphia Communications Corp.'s Bankruptcy (CW)." Harvard Business School Spreadsheet Supplement 208-718, March 2008.  View Details
• Gilson, Stuart C. "Continental Airlines - 1992 (Abridged) (CW)." Harvard Business School Spreadsheet Supplement 207-714, April 2007.  View Details
• Gilson, Stuart C. "Continental Airlines--1992 (Abridged)." Harvard Business School Case 294-058, November 1993. (Revised April 2007.)  View Details
• Gilson, Stuart C. "Flagstar Companies, Inc. (Abridged)." Harvard Business School Case 206-076, December 2005. (Revised April 2007.)  View Details
• Gilson, Stuart C., and Perry Fagan. "E.I. du Pont de Nemours and Company: The Conoco Split-off (A)." Harvard Business School Case 202-005, December 2001. (Revised July 2005.)  View Details
• Gilson, Stuart C., and Perry L. Fagan. "Arch Wireless, Inc." Harvard Business School Case 205-024, January 2005. (Revised November 2014.)  View Details
• Gilson, Stuart C. "FAG Kugelfischer-A German Restructuring." Harvard Business School Case 298-046, March 1998. (Revised November 2004.)  View Details
• Gilson, Stuart C. "Seagate Technology Buyout (TN)." Harvard Business School Teaching Note 204-160, May 2004.  View Details
• Gilson, Stuart C., and Perry Fagan. "Finova Group, Inc. (A), The." Harvard Business School Case 202-095, January 2002. (Revised January 2003.)  View Details
• Gilson, Stuart C., and Perry Fagan. "Finova Group, Inc. (B), The." Harvard Business School Case 202-096, January 2002. (Revised January 2003.)  View Details
• Andrade, Gregor M., Stuart C. Gilson, and Todd C. Pulvino. "Seagate Technology Buyout." Harvard Business School Case 201-063, April 2001. (Revised March 2002.)  View Details
• Gilson, Stuart C., and Perry Fagan. "E.I. du Pont de Nemours and Company: The Conoco Split-off (B)." Harvard Business School Case 202-006, December 2001.  View Details
• Gilson, Stuart C., and Perry Fagan. "E.I. du Pont de Nemours and Company: The Conoco Split-off (C)." Harvard Business School Case 202-007, December 2001.  View Details
• Gilson, Stuart C., C. Fritz Foley, and Perry Fagan. "Alphatec Electronics Pcl." Harvard Business School Case 200-004, February 2000. (Revised March 2001.)  View Details
• Gilson, Stuart C. "Valuing Companies in Corporate Restructurings: Technical Note." Harvard Business School Technical Note 201-073, December 2000. (Revised December 2016.)  View Details
• Gilson, Stuart C., and Jose Camacho. "Loewen Group Inc., The." Harvard Business School Case 201-062, November 2000. (Revised December 2000.)  View Details
• Gilson, Stuart C., and Jeremy Cott. "Flagstar Companies, Inc." Harvard Business School Case 299-038, December 1998. (Revised May 1999.)  View Details
• Gilson, Stuart C. "FAG Kugelfischer- A German Restructuring (TN)." Harvard Business School Teaching Note 298-128, May 1998.  View Details
• Gilson, Stuart C. "Chase Manhattan Corporation: The Making of America's Largest Bank (TN)." Harvard Business School Teaching Note 298-127, May 1998.  View Details
• Gilson, Stuart C. "UAL Corporation (TN)." Harvard Business School Teaching Note 298-126, April 1998.  View Details
• Gilson, Stuart C., and Cedric Escalle. "Chase Manhattan Corporation: The Making of America's Largest Bank." Harvard Business School Case 298-016, July 1997. (Revised April 1998.)  View Details
• Gilson, Stuart C. "Donald Salter Communications, Inc. (TN)." Harvard Business School Teaching Note 298-089, December 1997.  View Details
• Gilson, Stuart C. "Scott Paper Company (TN)." Harvard Business School Teaching Note 298-088, December 1997.  View Details
• Gilson, Stuart C. "Navistar International (TN)." Harvard Business School Teaching Note 298-086, December 1997.  View Details
• Gilson, Stuart C. "USX Corporation (TN)." Harvard Business School Teaching Note 298-085, December 1997.  View Details
• Gilson, Stuart C., and Jeremy Cott. "Scott Paper Company." Harvard Business School Case 296-048, January 1996. (Revised September 1997.)  View Details
• Gilson, Stuart C., Vincent Hemmer, Eric Rahe, David Shorrock, and Stephen Voorhis. "Transportation Displays, Incorporated (D): Exiting from a Successful Restructuring." Harvard Business School Case 297-085, February 1997.  View Details
• Gilson, Stuart C. "First Capital Holdings Corp. (TN)." Harvard Business School Teaching Note 296-095, May 1996.  View Details
• Gilson, Stuart C., Harry DeAngelo, and Linda DeAngelo. "First Capital Holdings Corp." Harvard Business School Case 296-032, May 1996.  View Details
• Gilson, Stuart C., and Jeremy Cott. "USX Corporation." Harvard Business School Case 296-050, February 1996.  View Details
• Gilson, Stuart C., Joel T. Schwartz, Steve Silver, and David Stemerman. "Transportation Displays Incorporated (C): The Case for a Preemptive Restructuring." Harvard Business School Case 296-035, January 1996.  View Details
• Gilson, Stuart C., and Jeremy Cott. "UAL Corporation." Harvard Business School Case 295-130, March 1995. (Revised April 1995.)  View Details
• Gilson, Stuart C., and Jeremy Cott. "Donald Salter Communications, Inc." Harvard Business School Case 295-114, March 1995.  View Details
• Gilson, Stuart C., and Jeremy Cott. "Navistar International." Harvard Business School Case 295-030, November 1994.  View Details
• Gilson, Stuart C., Harry DeAngelo, and Linda DeAngelo. " First Executive Corporation. " Harvard Business School Case 294-105, March 1994. (Revised July 1994.)  View Details
• Fenster, Steven R., and Stuart C. Gilson. "Adjusted Present Value Method for Capital Assets, The ." Harvard Business School Background Note 294-047, November 1993. (Revised July 1994.)  View Details
• Gilson, Stuart C. "Continental Airlines--1992 & Continental Airlines--1992 (Abridged) (TN)." Harvard Business School Teaching Note 294-127, May 1994.  View Details
• Gilson, Stuart C. "Humana, Inc.--Managing in a Changing Industry (TN)." Harvard Business School Teaching Note 294-130, May 1994.  View Details
• Gilson, Stuart. "Humana, Inc.: Managing in a Changing Industry." Harvard Business School Case 294-062, March 1994. (Revised December 2014.)  View Details
• Fenster, Steven R., Stuart C. Gilson, and Roy Burstin. "National Convenience Stores, Inc." Harvard Business School Case 294-068, January 1994.  View Details
• Gilson, Stuart C. " Continental Airlines--1992. " Harvard Business School Case 293-132, May 1993.  View Details
• Feldman, Emilie, Stuart Gilson, and Belen Villalonga. " When Do Analysts Add Value? Evidence from Corporate Spinoffs. " December 2009.  View Details
• Gilson, S. C., and J. Warner. "Private Versus Public Debt: Evidence from Firms that Replace Bank Loans with Junk Bonds." April 2000.  View Details

Corporate Restructuring and Business Insolvency: Economic Impact and Best Practices Stuart C. Gilson is studying how severe financial distress impacts corporate policies and economic resource allocation. He is also studying how managers can best respond to financial distress in order to preserve and grow value. He is undertaking this research through a combination of field research and large-sample analysis. Much of his work focuses on the role of corporate bankruptcy law in the resolution of financial distress. His past research in this area has considered how management tenure and corporate governance are affected in firms that reorganize in Chapter 11. He has also studied what factors help or hinder the restructuring process and the likelihood of a successful reorganization. For example, he has shown that negotiations in Chapter 11 often break down because competing classes of claimholders come to the negotiations with widely divergent (and deliberately biased) estimates of what the firm is worth. In one ongoing project, he is studying how bankruptcy laws differ across a large sample of countries, to determine how (or whether) the characteristics of a country's bankruptcy laws affect managers' willingness to take risks. In another project, he is studying how efficiently priced are the debt and equity claims of firms in Chapter 11, in an attempt to understand how active trading in these claims (which has increased dramatically in recent years) affects the resolution of financial distress. Finally, he is studying bankrupt firms' increasing use of asset sales (through so-called "Section 363" transactions) to restructure their balance sheets (as opposed to traditional consenual reorganizations under Chapter 11 of the U.S. Bankruptcy Code).

Winner of the 2012 Distinguished Paper Award from the Business Policy and Strategy Division of the Academy of Management for his paper with Emilie Feldman and Belén Villalonga, “Do Analysts Add Value When They Most Can? Evidence from Corporate Spinoffs” ( Strategic Management Journal ).

Appointed Business Law Advisor to the Business Bankruptcy Committee of the American Bankruptcy Association, 2008–2010.

Nominated for the 1998 Smith Breeden Prize for best paper in the Journal of Finance for “Transactions Costs and Capital Structure Choice: Evidence from Financially Distressed Firms” (1997).

Awarded the John M. Olin Visiting Professor Fellowship, University of Virginia Law School, 1997.

Winner of the 1995 Graham and Dodd Award for Excellence in Financial Writing from the Financial Analysts Journal and the CFA Institute for "Investing in Distressed Situations: A Market Survey" (1995).

Nominated for the 1994 Smith Breeden Prize for best paper in the Journal of Finance for "CEO Compensation in Financially Distressed Firms: An Empirical Analysis" (with M. R. Vetsuypens, 1993).

Winner of the 1991 Outstanding Paper in Financial Management at the Financial Management Association Annual Meetings for "CEO Compensation in Financially Distressed Firms: An Empirical Analysis" (with M. R. Vetsuypens).

• Curriculum Vitae
• corporate finance
• mergers and acquisitions
• restructuring
• corporate governance
• crisis management
• financial strategy
• investment banking industry
• legal services
• North America
• South America
• Southeast Asia
• United Kingdom
• Western Europe

Areas of Interest

Additional topics, geographies.

Distressed Asset Investing and Corporate Restructuring

Program overview.

The decade-spanning bull market that America has enjoyed — the longest in history — has been severely disrupted. But one result of the tremendous volatility and uncertainty currently in the market is that there will likely appear once-in-a-generation opportunities to acquire formerly pricey assets at a discount and realize above-market returns by investing in financially strapped companies.

Distressed Asset Investing and Corporate Restructuring will present the challenges and techniques to help you identify and evaluate the investment opportunities that are rapidly surfacing in today's marketplace. Sharpen your ability to spot promising investment opportunities in this lucrative asset class by learning how to assess the value of a company in or close to bankruptcy and understand how that value is likely to be distributed across the layers of the capital structure.

For those in the role of a senior-level leader in a company facing distress, whether due to economic decline or having undergone a leveraged buyout or for any other reason, this program is also right for you. Gain clarity and increased confidence when evaluating your alternatives, on both the operating and the financing sides of your business, and hone your understanding of the potential benefits and consequences of the restructuring alternatives available to the company.

Date, Location, & Fees

If you are unable to access the application form, please email Client Relations at [email protected] .

June 3 – 7, 2024 Philadelphia, PA $12,000

February 10 – 14, 2025 Philadelphia, PA $12,500

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Program Experience

Who should attend, testimonials, highlights and key outcomes.

In Distressed Asset Investing and Corporate Restructuring , you will:

• Understand how and why a company fails and the turnaround process
• Foresee signs of crisis in a firm's financial statements
• Identify the long-term value of and investment opportunities in distressed assets
• Appreciate the time frame to turn around a distressed asset and the level of risk involved
• Become knowledgeable about the roles of managers, investors, advisors, and consultants in restructuring debt
• Hone negotiation skills to maximize returns of complex distressed situations

Experience & Impact

Distressed Asset Investing and Corporate Restructuring is an essential program for every company leader and corporate investor who is looking beyond the current crisis, and preparing to navigate and capitalize on the distressed asset investment opportunities that are emerging.

In this unique program, you will come to understand corporate restructuring and distressed asset investing from multiple points of view: that of company managers, CFOs, investors, bankers, advisors, and consultants. No matter your specific role, you will benefit from seeing the total picture, since many functions overlap or are interdependent. For example, to invest wisely in a distressed company, you need to grasp how the turnaround will be managed. In addition, many hedge fund managers and private equity firms now engage in a “loan-to-own” scenario in which they buy debt with an eye toward achieving equity ownership in the post-restructured company. Today, the savviest investors, managers, and advisors will be those who understand all sides of a distressed situation and envision the possibility of tremendous returns.

This program will take a value investing approach to analyzing distressed assets, including the technique of estimating the fundamental intrinsic value of the underlying business. This knowledge will help you move beyond faulty notions of equating price with value that might hamper your investing success. You will also learn how to perform discounted cash flow valuation in distressed situations. Moreover, you will find out about the relevant legal environment and its implications for restructuring options.

Wharton LIVE Online Programming

Real-time peer learning with deep faculty engagement and global networking

Building Your Network

• Wharton After Hours Wharton faculty will lead an online discussion board that moves beyond the day’s content into global current events. Think of it as faculty office hours but online.
• Reflection Tool Participants summarize key concepts and insights they learn each day and describe how these insights might impact them or their behavior going forward. Participants identify questions they wish to ask the faculty or fellow participants. These reflections are reviewed daily in peer groups to refine and deepen comprehension during the program as well as enabling better recall to apply the learning for maximum impact and value creation.

Session Topics Include:

• Assessing the Financial Distress
• Causes of Distress: The Danger of Growth and Pathways for Restructuring
• Strategies for Investors: Hedge Funds and Private Equity
• Foundations of Value Investing in a Distressed Environment
• Exchange Offers and Debt Restructuring
• Distressed Negotiation
• The Legal Environment: Implications for Restructuring Alternatives
• Turnaround Management
• The New Business Landscape: Trend Acceleration in the Wake of the Pandemic

Convince Your Supervisor

Here’s a justification letter you can edit and send to your supervisor to help you make the case for attending this Wharton program.

Due to our application review period, applications submitted after 12:00 p.m. ET on Friday for programs beginning the following Monday may not be processed in time to grant admission. Applicants will be contacted by a member of our Client Relations Team to discuss options for future programs and dates.

Distressed Asset Investing and Corporate Restructuring offers timely and highly relevant content to many different types of professionals.

On the investor side, the program is relevant for anyone interested in investing in or providing advisory services to firms in distressed situations. This will include those working in hedge funds, private equity, or direct investment.

It will also be of interest to ultra-high net-worth investors and institutions who wish to assess money managers who invest in distressed assets and want to know how to effectively evaluate their strategies and performance.

On the corporate side, chief financial officers, particularly those that are currently under pressure to maintain liquidity and need to change debt strategies in the current economic climate, will benefit from attending this program.

Additionally, the techniques and concepts we discuss will also be directly relevant for those working in advisory roles such as consultants, attorneys, and CPAs, and those serving companies facing restructuring or who are hired by investors who are considering investment in distressed companies.

Job functions and roles include: Managers:

• CFOs and other C-suite executives who are responsible for negotiating with lenders and/or raising capital
• Senior-level executives at highly leveraged and private-equity-owned companies
• Distressed-debt purchasers
• Hedge-fund portfolio managers
• Private-equity groups
• Chief investment officers and investment analysts for family offices
• Portfolio managers for pension funds, sovereign wealth funds, and large institutional investors
• High-yield investors
• Limited partners
• Multinational management consultants
• Investment bankers and commercial lenders
• Bank loan-sale professionals
• Senior lenders and second-lien lenders
• Workout lenders (debtor-in-possession or DIP lending)
• Corporate bankruptcy attorneys

Fluency in English, written and spoken, is required for participation in Wharton Executive Education programs unless otherwise indicated.

Group Enrollment

To further leverage the value and impact of this program, we encourage companies to send cross-functional teams of executives to Wharton. We offer group-enrollment benefits to companies sending four or more participants.

Kevin Kaiser, PhD See Faculty Bio

Co-Academic Director

Adjunct Professor of Finance; Senior Director, Harris Family Alternative Investments Program, The Wharton School

Research Interests: Corporate finance, managing for value, private equity, financial distress

Bilge Yilmaz, PhD See Faculty Bio

Wharton Private Equity Professor; Professor of Finance; Academic Director, Harris Family Alternative Investments Program, The Wharton School

Research Interests: Corporate finance, alternative investments, game theory, political economy

David Skeel, JD See Faculty Bio

S. Samuel Arsht Professor of Corporate Law, University of Pennsylvania Carey Law School

Douglas Rosefsky, MBA See Faculty Bio

Adjunct Professor of Entrepreneurship, INSEAD; Founding Partner, Prudentia Capital

I took the Distressed Asset Investing and Corporate Restructuring program as part of my Advanced Finance Program . The disruptions and market dislocations caused by the COVID-19 pandemic highlighted the importance of being able to read early signs of distress and execute on these opportunities with conviction. The course is a highly engaging, interactive, and practical learning journey. It provided me with deep insight into the perspectives and incentives of the diverse stakeholders during the bankruptcy and turnaround process. We learned how to differentiate between value-adding and value-destroying activities, which is crucial for leaders to identify at the best of times but even more so in times of distress. There were many opportunities to put the newly acquired skills into practice by working through the restructuring and negotiation process of real-life business cases. One of the highlights was gaining access to the leaders who performed the actual turnarounds in those companies. Having the opportunity to compare notes and learn from their experience was invaluable. While skeptical at first, I benefited from the virtual-life nature of the program, particularly when working through the more complex, Excel-heavy parts that required undistracted focus. The networking did not come up short. We had many opportunities to get to know our fellow participants and professors during the “fireside” chats and other events that the fantastic faculty members organized for us. Regardless of whether you want to learn more about distressed asset investing from an investor or company leader’s perspective, this program will prepare you with the right mindset and action plan to make the best decisions in times of high uncertainty."

Marc Nauer  Executive Director , Smarter Communities Ltd.

Harshavardhan Dole  Vice President, IIFL (India Infoline Group)

Harshavardhan explains, "The course is extremely comprehensive and has given me a perspective on three factors. First, why firms get into distress. Secondly, how do we structure them? And third, most importantly, as an investor, what factors one has to take into account while investing in such times."

Contrary to what many think, a corporate near-death experience (meaning a company is approaching or in bankruptcy) does not necessarily mean it is the end and all is about to be lost. I believe it is from “non-normal” situations we can learn the most about what is important. How can we survive or avoid a liquidity crisis or insolvency by pulling off a turnaround as a company, or how can we profit from distress as an investor? What truly drives value creation, and why is growth not always a positive? Through case studies, number crunching, memorable storytelling, lively discussions, collegial experience sharing, intense deal negotiations, and reading, Distressed Asset Investing and Corporate Restructuring provides a framework for thinking about investing and businesses that is actionable. After completing this program, you should be able to answer interesting questions, such as: What is distressed investing and how does it differ from other types of investing? Why does the company find itself in distress; are the root causes exogenous or indigenous? What is the value (not price) of a distressed business and why does that “number” matter so much? How can you source distressed investment opportunities? Who are the players; what are their incentives and goals? Professor Kaiser and distinguished guest lecturers bring interesting and timely content to life in a fun, illuminating, and engaging manner. You will also meet a diverse group of interesting and inspiring classmates from across the globe you otherwise might not have crossed paths with. I would recommend the Distressed Asset Investing and Corporate Restructuring program to anyone interested in gaining many new and even counterintuitive insights on a broad spectrum of topics. If you find yourself on the road to distress: know how you can live to see another day, and even create value, beyond the scope of special situations."

Erik Anerud  Analyst, BE Bio Energy Group

Lior Arussy  CEO, WordCreate Inc.

“Always assume you’re wrong until you find the data to back up what you think.” Lior Arussy, CEO WordCreate, Inc. shares this and other key insights from the program.

Due to the global pandemic situation, a lot of good assets will go into distress and unfortunately, corporate bankruptcies will soar. As an investor, there will be opportunities to acquire distressed assets, but one needs to be very careful in picking the right ones. I was looking for a course that could provide me with the basic framework for analyzing distressed assets and turning them around for high returns. So, I enrolled in Distressed Asset Investing and Corporate Restructuring . In the course I learned a lot about why companies get into financial distress and how to spot distress by looking at their financial statements. I also learned how to apply game theory to negotiating business deals to create win-win scenarios. I also discovered more about how to use spreadsheets for financial modeling and debt restructuring. The class also changed my perceptions about Chapter 11 . Previously, I assumed it was a completely negative situation, but I came to realize that it’s not necessarily bad for a struggling company to go under Chapter 11 as it provides the company an opportunity and required framework to come out of distress through debt restructuring and change in management structure. In addition, I learned that growth is not equal to value creation; sometimes, too much growth can risk the future of the company. Before taking this course, I was always thinking about growth first. Now I think about overall profitability and cost of growth. The live online format of the course was very effective. I live in San Diego, CA, so I took the class in the morning, then did my regular day job, and finished homework afterward, so it worked out perfectly for me. Plus, Professor Kevin Kaiser could participate virtually in small breakout sessions to look into how we were solving a business case. I don’t think that is actually even possible in an in-person class. I would absolutely recommend the course. To anybody who wants to learn more about turn-around, corporate debt restructuring, and value creation for investors — this is the course for you."

Sumit Tomar  President and CEO, pSemi Corp., San Diego, CA

I attended Distressed Asset Investing and Corporate Restructuring to gain a better understanding of what drivers are used to measure a company’s viability and how a restructure may help to restore those components. Every day was unique and interesting, covering new material. In addition to all the material presented, I really enjoyed the depth of knowledge displayed by Professor Kaiser and the multiple real-life examples that put the material in context. The insights gained from this course have both confirmed and broadened my perspective on value creation and its measurements. This course has also helped me look internally and focus on those value creation drivers to enhance corporate value. One thing that stood out was regarding valuation models — all of them are incorrect because they rely on assumptions, and assumptions don’t change the actual value of your company. That started some other interesting discussions. You can incentivize managers on revenue or profit, but that should be a result, not the goal, of properly structured incentives. When the right incentives are put in place, they lead to profit and value creation. When profits are the sole goal, you can destroy corporate value and cause real damage to cash flows since capex items are not reflected on the P&L. Those kinds of insights were very thought-provoking. I had no experience with online learning, so I envisioned a webinar. I didn’t expect it to be so interactive. The professor kept us engaged, relating everything to real examples from his experience and to companies currently in the news. We took two short breaks every day and everyone was eager to get back to the virtual classroom. Requesting that cameras be turned on at all times and having break-out rooms for group discussions helped to bridge the virtual gap. On the last day we worked in groups of three or four on a negotiation project. We talked about our strategy, and then combined with another group to negotiate. Then we went back to the entire group. In a virtual setting, that peer-to-peer interaction was very beneficial, and more of a personal touch than I expected. I would recommend this course to others [em dash]not only to investors and attorneys, but also to executive management interested in developing a better understanding of value creation and sustainability. I am looking forward to taking Wharton’s The CFO: Becoming a Strategic Partner program next. ”

Rocky Schweser  Chief Financial Officer, Tactical Air Support Inc.

The book The Black Swan: The Impact of the Highly Improbable by Nassim Nicholas Taleb (2007) described how an unexpected event can wipe out all our plans and preparations, and this is precisely what happened in March 2020. Today’s stressed economic environment has put organizations in an unprecedented and highly complex situation where priorities have completely changed. Wharton's Distressed Asset Investing program provides a week-long intensive bootcamp to help brave the storm, understand the fundamental and practical applications of corporate restructuring and distressed asset investing. I have recently transitioned from practicing M&A Advisory toward Corporate Restructuring, in light of the current macroeconomic situation. The program’s focus on collaboration among the cohort through case study sessions, practical frameworks for assessing opportunity within distressed assets, and use of real-world examples provided a holistic overview and brought me up to speed with many of my restructuring colleagues. We benefited greatly from the roundtable discussions following each topic, as many members of the cohort would relate prior experiences or offer their own perspective. The case study sessions allowed us to engage in thought-led discussions with peers (including management, investors and practitioners) leveraging prior experiences to help propose a solution following bilateral negotiations which is finally presented to the wider cohort. The ability to analyze and predict how a number of parties interpret the same situation is a highly important skill within a corporate restructuring process which will likely see a number of stakeholders such as an ad-hoc committee of bondholders, lending banks and management voice their opinions regarding a potential transaction and a bespoke solution must be tailored to the interests of all. Since completing the program, I have made it my goal to revisit the class material every 2 weeks to reflect on how I can better implement my learnings into my work. The course helped me frame commercial discussions, and deliver value-added and differentiated advice to our clients. The timing of this course couldn’t better and is a definite recommend for senior managers within organizations indicating signs of stress, private capital investors looking to transition towards seeking value in workout situations, and practitioners looking to gain an understanding of the restructuring process. Howard Marks, founder of Oaktree Capital Management (a leading distressed investor), famously said in 2019, “What return should you expect from distressed debt investing when the world is not distressed?" In 2020, the answer is much more than it was in 2019, and this course might help you capitalize on the opportunity and get there too."

Jishnu Suriyakumaran  Associate, PJT Partners, London, UK

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Corporate Restructuring: A Case Study of Adani Enterprises, India

Corporate Restructuring has become a major component in the financial and economic environment all over the world. It is the process of redesigning one or more aspects of a company. The process of reorganizing a company may be implemented due to a number of different factors, like positioning the company to be more competitive, survive a currently adverse economic climate, or poise the corporation to move in an entirely new direction and many more. Corporate restructuring is needed to counter challenges in competitive business environment. Most of the organizations carry out corporate restructuring as per the needs of the business. Some do it through mergers, acquisitions, and some by demergers as well; while some others make structural changes and carry out resource optimization in the organization. During the past decade, corporate restructuring has increasingly become a staple of business and a common phenomenon around the world. Unprecedented number of companies across the world have reorganized their divisions, restructured their assets and streamlined their operations in a bid to spur the company performance. Corporate Restructuring generally includes a diverse array of company actions, from selling business lines to acquiring new business lines, from downsizing workforces to the addition of new business units and from stock repurchase to debt elimination. It has enabled numerous organizations to respond quickly and more effectively to new opportunities and unexpected pressures so as to re-establish their competitive advantage. This paper analyzes the corporate restructuring of Adani Enterprise’s, announced at the start of 2015 and approved by the board and shareholders in April 2015.

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Please note you do not have access to teaching notes, corporate restructuring and governance implications: a case study of the guoco group.

Journal of Asia Business Studies

ISSN : 1558-7894

Article publication date: 16 October 2009

I study a series of restructuring activities undertaken by Guoco Group Limited in recent years and the implications on minority shareholders. The divestment of Dao Heng Bank Group to DBS Group reaped substantial benefits for Guoco, including an enormous cash reserves to fund future investments. However, the cash hoard was not implemented to the best use by Guoco’s managers. Subsequently, Guoco was involved in a number of share buybacks schemes. The share‐buybacks met strong resistance from the minority shareholders and eventually forced out the second largest shareholders. Guoco was also engaged in related party transaction involving its subsidiaries in the property development business. Overall, I find evidences suggesting that corporate restructuring activities enhance the controlling owner’s grip on the group at the expense of the minority shareholders.

• Corporate restructuring
• Corporate governance

Kusnadi, Y. (2009), "Corporate Restructuring and Governance Implications: A Case Study of the Guoco Group", Journal of Asia Business Studies , Vol. 4 No. 1, pp. 39-48. https://doi.org/10.1108/15587890980001518

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Analyzing the role of mergers and acquisitions and environmental investment in achieving energy transition and sustainability

• Published: 18 May 2024
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• Yibing Li 1 &
• Xuejiao Geng 1  

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With the exacerbation of environmental problems across the globe, corporate environmental performance draws increasing attention from investors. The important role that mergers and acquisitions (M&A) plays in corporate environmental protection has been reported; however, how the M&A activity in the energy industry affects corporate environmental protection investment (EPI), and what are the contributing factors to this effect remain to be explored. In this study, with Chinese listed energy enterprises as research samples, the impact of M&A activity on corporate EPI is examined and the mediator variable is identified; meanwhile, the contributing factors to this impact are explored. The results show that M&A activity in the energy industry will boost corporate EPI, with the effect more pronounced in the traditional energy industry than in the new counterpart; M&A activity will promote environmental investment by increasing M&A frequency; and the impact is more prominent in enterprises in under-marketized regions or subject to higher financing constraints. Policy recommendations are proposed per the research findings in hopes that the research could help enterprises reach sustainable economic development.

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Environmental-, social-, and governance-related factors for business investment and sustainability: a scientometric review of global trends

Mandatory CSR and sustainability reporting: economic analysis and literature review

The Influence of Firm Size on the ESG Score: Corporate Sustainability Ratings Under Review

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Li, Y., Geng, X. Analyzing the role of mergers and acquisitions and environmental investment in achieving energy transition and sustainability. Econ Change Restruct 57 , 131 (2024). https://doi.org/10.1007/s10644-024-09691-0

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DOI : https://doi.org/10.1007/s10644-024-09691-0

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