Wisconsin Central Ltd Railroad and Berkshire Partners (A): Leveraged Buyouts and Financial Distress

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Case

Reference no. 9-190-062

Subject category: Finance, Accounting and Control

Authors: Michael Jensen (Ross School of Business, University of Michigan); W Burkhardt (Harvard Business School); Brian Barry (Harvard Business School)

Published by: Harvard Business Publishing

Originally published in: 1989

Version: 21 March 2000

Length: 20 pages

Data source: Field research

Topics: Financial management; Financing; Control systems; Leveraged buyouts; Finance; Loans

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Abstract

Wisconsin Central Ltd is a regional railroad formed in a leveraged buyout, which is currently in default on its loan covenants. The case uses this situation to examine the financial structure of a typical LBO association and its internal control mechanisms and distinct role of the board of directors.

Location:

Illinois

Size:

850 employees

Other setting(s):

1988