The Fall of the Lifetime Manager

2020 ◽  
pp. 139-162
Author(s):  
Sarah Paterson
Keyword(s):  
Capital Structure ◽  
Control Rights ◽  
Corporate Reorganization ◽  
Control Concept

Chapter 6 explores the significance of shifts in the identities of debtor firms, and of the individuals who manage them, for the concept of debtor control rights in Chapter 11. The argument is made that these changes in identities suggest reasons to question the concept of allocation of control rights to the debtor as a means of incentivizing early filing. However, the argument is made that the concept of debtor control rights is important in a different way when the purpose of the case is to deleverage a complex, leveraged capital structure. When the chapter turns to examine England, it reveals that participants in this type of reorganization case have mobilized corporate reorganization law in ways which take account of the new demands of the debtor control concept, but without bringing on board inherited ideas associated with the concept from traditional US corporate reorganization practice.

The Fall of the Gentleman Banker

2020 ◽  
pp. 163-188
Author(s):  
Sarah Paterson
Keyword(s):  
Capital Structure ◽  
Corporate Reorganization ◽  
Made In

This chapter focuses on shifts in the identities of the financial creditors who participate in the reorganization of a complex, leveraged capital structure. It argues that the changing identities of these participants undermine some of the assumptions made in Chapter 11 about the ways in which reputational concern will interact with corporate reorganization law to motivate bargaining. Once again, the account in the chapter reveals why the comparatively recent development of corporate reorganization law to deleverage a complex capital structure in England means that the same assumptions are not made about the identities of the participants in the process, the role of reputation, or the bargaining environment in general.

Capital Structure Following Chapter 11 Reorganizations

2004 ◽  
Author(s):  
Randall A. Heron ◽  
Kimberly Rodgers Cornaggia ◽  
Erik Lie
Keyword(s):  
Capital Structure

scholarly journals Dinamika Konsepsi Penguasaan Negara Atas Sumber Daya Alam

2016 ◽  
Vol 12 (2) ◽  
pp. 401
Author(s):  
Ahmad Redi
Keyword(s):  
Natural Resources ◽  
House Of Representatives ◽  
Constitutional Court ◽  
State Control ◽  
Control Rights ◽  
Control Concept ◽  
Control Right ◽  
The Government ◽  
Draft Bill ◽  
The Guardian

Discourse concerning state control concept on natural resources in Article 33 clause (3) of the 1945 Constitution is very dynamic. Such dynamic can be seen on      a variety of conceptions of state control rights on natural resources formulated in various acts in natural resources area. Lack of single concept on ‘state control right’ will impact to unfavorable situation where natural resources shall escape from conception of state control right and into control not by the state. The Constitutional Court as the Guardian and Interpreter of the Constitution has a significant role to ascertain that an act in natural resources area really adopt the principle of state control on natural resources in Indonesia. This article analyzes on dynamics of conception of state control on natural resources in various acts and the role of the Constitutional Court in guarding and interpreting acts in natural resources in order to be in accordance with Article 33 clause (3) of the 1945 Constitution. From the result of analysis a conclusion is achieved that there are many different concepts    of state control on natural resources in various acts in natural resources area. The Constitutional Court indeed has made interpretation on state control right. In order to make the conception stronger it is necessary to have an act in natural resources area as instruction of Article 33 clause (5) of the 1945 Constitution that further provisions of Article 33 shall be regulated by an act. Moreover, DPR (The House of Representatives) and the Government have to make certain or definite the concept of state control right in every draft bill of natural resources area so that liberalism and capitalism stream will not erode the principle of state control right.

The Rise of Secured Credit

2020 ◽  
pp. 109-138
Author(s):  
Sarah Paterson
Keyword(s):  
Bargaining Power ◽  
Institutional Environment ◽  
Control Rights ◽  
Corporate Reorganization ◽  
The Past ◽  
Secured Transactions ◽  
Equity Finance ◽  
Secured Creditors ◽  
The Way

This chapter explores the way in which the shifts in the fields of finance and non-financial corporates discussed in Chapters 3 and 4 have led to changes in US secured transactions law. It examines the way in which these changes have, in turn, shifted bargaining power towards secured creditors when a debtor attempts to reorganize its debt and equity finance. However, the argument is made that this gives rise to different issues from the traditional concern for secured creditor liquidation bias when it is set in the wider organizational and institutional environment which the book has begun to examine. Turning to England, the chapter explores how the English courts have generally supported the allocation of control rights in distress to senior financial creditors. It reveals why this has, once again, made English corporate reorganization law particularly well adapted to the demands of the past decade.

scholarly journals Reorganization or Liquidation: Bankruptcy Choice and Firm Dynamics

2021 ◽  
Author(s):  
Dean Corbae ◽  
Pablo D’Erasmo
Keyword(s):  
Capital Structure ◽  
Firm Dynamics ◽  
Law Firms ◽  
Bankruptcy Law ◽  
Entry And Exit ◽  
Dynamics Model ◽  
Financial Decisions ◽  
Long Run ◽  
Bankruptcy Policy

Abstract In this paper, we ask how bankruptcy law affects the financial decisions of corporations and its implications for firm dynamics. According to current U.S. law, firms have two bankruptcy options: Chapter 7 liquidation and Chapter 11 reorganization. Using Compustat data, we first document capital structure and investment decisions of non-bankrupt, Chapter 11, and Chapter 7 firms. Using those data moments, we then estimate parameters of a general equilibrium firm dynamics model with endogenous entry and exit to include both bankruptcy options. Finally, we evaluate a bankruptcy policy change similar to one recommended by the American Bankruptcy Institute that amounts to a “fresh start” for bankrupt firms. We find that changes to the law can have sizable consequences for borrowing costs and capital structure which via selection affects productivity, as well as long run welfare.

The Rise of Leverage

2020 ◽  
pp. 47-82
Author(s):  
Sarah Paterson
Keyword(s):  
Capital Structure ◽  
Corporate Reorganization ◽  
The Future

This chapter explores the first of the changes in logic and practice in the fields of finance and non-financial corporates with which the book is concerned: the rise of the leveraged capital structure. It explores the implications of the leveraged capital structure for the ways in which corporate reorganization law is mobilized and adapted by the participants in the corporate reorganization process. It argues that the first step in analysing these new adaptations is to focus on the concepts which are used to describe them. It further argues that when this is done certain implications are revealed for current debates about the content and reform of US corporate reorganization law. It argues that England has had fewer problems in framing appropriate concepts for analysing the new adaptations which are under examination in the chapter. However, it hints at potential challenges for England for the future, developed later in the book.

Bankrupt Innovative Firms

2021 ◽  
Author(s):  
Song Ma ◽  
Joy Tianjiao Tong ◽  
Wei Wang
Keyword(s):  
Technology Diffusion ◽  
Control Rights ◽  
Secured Debt ◽  
Innovative Firms ◽  
Secured Creditors

We study how innovative firms manage their innovation portfolios after filing for Chapter 11 reorganization using three decades of data. We find that they sell off core (i.e., technologically critical and valuable), rather than peripheral, patents in bankruptcy. The selling pattern is driven almost entirely by firms with greater use of secured debt, and the mechanism is secured creditors exercising their control rights on collateralized patents. Creditor-driven patent sales in bankruptcy have implications for technology diffusion—the sold patents diffuse more slowly under new ownership and are more likely to be purchased by patent trolls. This paper was accepted by Gustavo Manso, finance.

Winn-Dixie Stores in 2005 (B): Cleanup on Aisle 11

2017 ◽  
pp. 1-7
Author(s):  
James Shein ◽  
Evan Meagher
Keyword(s):  
Supply Chain ◽  
Capital Structure ◽  
Economies Of Scale ◽  
Low Cost ◽  
Grocery Store ◽  
Administrative Costs ◽  
Structure Treatment ◽  
Short And Long Term ◽  
Expected Benefits

Grocery store chain Winn-Dixie had rapidly expanded in an effort to become a national retailer, and by 1999 it had more than 1,000 stores. The company began manufacturing its own products, reasoning that by owning more of the supply chain, it could offer the customer less expensive options. With its new geographic focus and manufacturing facilities, Winn-Dixie attempted to secure a position as a low-cost provider with a national presence. Instead of improving the company's position in the market, however, this strategy crippled both the short- and long-term prospects for Winn-Dixie. The company paid a high premium to expand and increased its leverage without ever realizing the purposed synergies. In fact, there were dis-economies of scale because the distribution, marketing, and administrative costs had risen along with the increased revenue. The expansion and inefficient manufacturing added complexity to its distribution network, and with a greater debt load and less cash, the company was unable to reposition itself in the market when its low-cost provider strategy failed. Not only was the company unable to pursue other opportunities but it also did not have the cash to properly maintain many of its existing stores, which quickly became run down. Winn-Dixie was stuck as a general grocer with few options at a time when the industry was rapidly evolving. Following faulty strategies of expansion, supply chain changes, and increased debt, Winn-Dixie declared bankruptcy. Students will take the view that Paul “Flip” Huffard, lead consultant from Blackstone LP, had in determining the valuation and new capital structure of the company. These decisions would be critical, as they affected what each creditor class would receive and whether Winn-Dixie could emerge from bankruptcy.Students will: 1. Assess the importance and negative financial impact of past strategic moves, and suggest possible future strategic directions and the expected benefits of such changes. 2. Learn quantitative valuation methods for a company in Chapter 11 and their effects on stakeholders. 3. Learn the elements of a plan of reorganization, including the capital structure, treatment of multiple creditor groups, and management compensation. 4. Discuss sources and uses of capital during a Chapter 11 turnaround.

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