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Abridged version
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Reference no. 9-294-058
Published by: Harvard Business Publishing
Originally published in: 1993
Version: 17 April 2007
Length: 17 pages
Data source: Field research

Abstract

The CEO (chief executive officer) is preparing a recommendation to the board regarding several possible outside investments in the company, which is currently operating in bankruptcy. In making his decision, the CEO has to consider various financial and strategic factors, including possible synergy benefits and support for the company's huge planned expenditures on new aircraft. To assess the relative merits of the competing investment proposals, it is also necessary to value the company's assets and prescribe a new capital structure for the company after it leaves Chapter 11. Tax factors are extremely important in the analysis. The final decision must be acceptable to the company's creditors and be compatible with allowed US bankruptcy practices.
Location:
Industry:
Size:
36,300 employees, USD5.5 billion revenues
Other setting(s):
1992

About

Abstract

The CEO (chief executive officer) is preparing a recommendation to the board regarding several possible outside investments in the company, which is currently operating in bankruptcy. In making his decision, the CEO has to consider various financial and strategic factors, including possible synergy benefits and support for the company's huge planned expenditures on new aircraft. To assess the relative merits of the competing investment proposals, it is also necessary to value the company's assets and prescribe a new capital structure for the company after it leaves Chapter 11. Tax factors are extremely important in the analysis. The final decision must be acceptable to the company's creditors and be compatible with allowed US bankruptcy practices.

Settings

Location:
Industry:
Size:
36,300 employees, USD5.5 billion revenues
Other setting(s):
1992

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