Corporate Finance
Corporate Restructuring
A restructuring changes the asset perimeter, control or creditor rights. This course compares going concern, liquidation, disposals, demergers and debt restructuring using the value available.
Course purpose
The decision examined
A distressed company may own assets whose going-concern value exceeds immediate sale proceeds while lacking cash to meet current obligations. The analysis must preserve viable value and allocate losses according to rights and negotiation.
Objectives
Learning outcomes
- Compare going-concern and liquidation value.
- Measure disposal and demerger effects.
- Build a creditor recovery waterfall.
Concepts
Key concepts
- Going concern
- Liquidation
- Disposal
- Demerger
- Priority
- Recovery rate
- New money
Syllabus
Course structure
- Restructuring forms
- Going concern
- Disposals
- Demergers
- Debt
- Claim priority
- Coordination
Extract
Analytical framework
Identify the value to preserve
The first comparison sets the value of assets kept in a viable business against their net liquidation value:
Going-concern surplus
A positive surplus supports seeking an alternative to a forced sale, but does not determine how that value should be allocated among claimant classes.
Full course
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