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Discusses the bankruptcy reorganization process, with an emphasis on valuation and capital structure. Serves as the basis for a bankruptcy reorganization game that has been used for many years in Creating Value Through Corporate Restructuring, a second-year finance course. The game is played in Chapter 11, after previous efforts to complete an out-of-court restructuring failed. Students are divided into five claimholder groups--secured debt holders, unsecured senior debt holders, etc.--and these groups, under the supervision of a bankruptcy judge, must negotiate a satisfactory plan of reorganization or suffer significant incremental losses through liquidation. Provides the background information with respect to Delaware's history, prospects, and financial condition necessary to play the game. A rewritten version of an earlier case.

Specialty chemical company Dixon must decide whether to acquire Collinsville, a business in a new segment, and how much to pay for it.

Spreadsheet Supplement for case 201097

A turnaround expert must determine whether a firm in distress is worth more as a going concern than its liquidation value. If so, the finances of the firm must be restructured in a way consistent with the bargaining power of the holders of the various securities. The restructuring requires a delay in principal repayment, rate concessions, and a debt-for-equity swap.

The manager of a small company growth fund considers relative merits of investing in a company's convertible debt versus its common.

Spreadsheet Supplement for case 292107

Cumberland has been in Chapter 11 for 18 months and is trying to formulate a plan of reorganization that will satisfy a variety of claimants. Teaching objective: valuation and negotiation issues.

A company in financial distress must design a successful exchange offer or face Chapter 11. Covers valuation and negotiation issues related to financial distress and the decision to file under Chapter 11 of the Bankruptcy Code.

Spreadsheet Supplement for case 291081.

MRC, Inc. faces a decision regarding entry into the production of polyester fiber in competition with much larger firms. An updated version of an earlier case by J.H. McArthur.

MRC must place a value on an acquisition prospect and also decide whether a deal makes sense from strategic and organizational perspectives. An updated version of and earlier case by W.E. Fruhan, Jr. and J.H. McArthur.

Spreadsheet Supplement for case 274118

Four individuals purchase a small company, making heavy use of debt financing.

Spreadsheet Supplement for case 273129