沃顿 高级公司理财学PElbo09.ppt

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 Notes on LBOs and Private Equity * Chapter 11 Reorganizations(Cont’d) Bargaining power of creditors because their votes are needed creditors with subordinated claims can hold out for violations of absolute priority (Macys) Notes on LBOs and Private Equity * Chapter 11 Reorganizations(Cont’d) Costs of Bankruptcy legal costs of a prolonged proceeding can be high (About 5% of assets in Warner study) value of firm may be run down by poor management Management in Chapter 11 is difficult and cumbersome Major decisions must be approved by the court Difficult to respond to opportunities or crises Notes on LBOs and Private Equity * Chapter 11 Reorganizations(Cont’d) Chapter 11 may result in inefficient operations by “economically distressed” firms that should be liquidated costs to existing creditors may not be considered because of protection As of 2000, average time in Chapter 11 is 2 years In one case, a firm was in Chapter 11 for 23 years Seems to be lower now Notes on LBOs and Private Equity * Chapter 11 Reorganizations(Cont’d) Results of study done in the ’90s One-third of chapter 11 cases result in Chapter 7 liquidations In 96% of Chapter 7 the assets were worthless ‘78-’80 study Direct costs $850 million Indirect cost were between $23.2 billion and $35.6 billion Results were similar in the ‘80’s Notes on LBOs and Private Equity * Outcomes ’78