by: Fenster, Steven R.; Reiferson, Paul J.; Burstin, Roy; Gilson, Stuart C.; Schwartz, Joel T.; Silver, Steven M.; Stemerman, David I.; Hemmer, Vincent; Rahe, Eric; Shorrock, David; Voorhis, Steve
Source: Harvard Business School
William Apfelbaum, president and CEO of Transportation Displays, Inc., must restructure both the company's method of doing business and its liabilities to keep it from bankruptcy. The value he hopes to receive from the reorganized company will be an important issue in the restructuring negotiations with creditors.
Transportation Displays, Inc. has gone through a series of restructurings. This case describes the last few stages, which substantially reduced debt and increased the ownership of management.
A company nears the end of a long multiyear turnaround and now must consider how to 'cash out' so its management can realize a financial return on investment. The privately held company has several options, including a leveraged ESOP and a leveraged recapitalization.
Following a successful corporate turnaround and, more recently, a leveraged recapitalization, management of a highly profitable, fast--growing outdoor advertising company must consider alternative ways to harvest cash flow from the company without jeopardizing the turnaround or incurring significant tax liabilities.
Publication Date: 1994-02-02