Chapter-17收購(gòu)、兼并和重組課后題目課件

AlternativeExitand

RestructuringStrategies:

ReorganizationandLiquidation

Whatisimportantisnotaddingmoreyearstolifebutmorelifetoyouryears.—DougFieldsExhibit1:CourseLayout:Mergers,Acquisitions,andOtherRestructuringActivitiesPartIV:DealStructuringandFinancingPartII:M&AProcessPartI:M&AEnvironmentCh.11:PaymentandLegalConsiderationsCh.7:DiscountedCashFlowValuationCh.9:FinancialModelingTechniquesCh.6:M&APostclosingIntegrationCh.4:BusinessandAcquisitionPlansCh.5:SearchthroughClosingActivitiesPartV:AlternativeBusinessandRestructuringStrategiesCh.12:Accounting&TaxConsiderationsCh.15:BusinessAlliancesCh.16:Divestitures,Spin-Offs,Split-Offs,andEquityCarve-OutsCh.17:BankruptcyandLiquidationCh.2:RegulatoryConsiderationsCh.1:MotivationsforM&APartIII:M&AValuationandModelingCh.3:TakeoverTactics,Defenses,andCorporateGovernanceCh.13:FinancingtheDealCh.8:RelativeValuationMethodologiesCh.18:Cross-BorderTransactionsCh.14:ValuingHighlyLeveragedTransactionsCh.10:PrivateCompanyValuationLearningObjectivesPrimaryLearningObjective:ToprovidestudentswithanunderstandingofalternativestrategiesforfailingbusinessesSecondaryLearningObjectives:ToprovidestudentswithanunderstandingofCriteriaforchoosingstrategyforfailingfirmsProcessusedtofileforbankruptcy,voluntaryandinvoluntarysettlementsinsideandoutsideofcourt,andvoluntaryandinvoluntaryliquidationRuleofLawand

CorporateAssetAllocationThesmoothfunctioningofcapitalmarketsrequiresrapidandfairresolutionofdisputesinvolvingthelegalrightsofborrowersandlendersStudiesshowthatborrowingcostsarelowerandaccesstocrediteasierincountrieswhichenforcecreditrightsTotalcostoffinancialdistress(i.e.,inabilitytomeetfinancialobligations)includesthefollowing:--Employeelayoffs--Firmunder-investment--Erodingcommunitytaxbaseandblight--Customerdissatisfactionwithdecliningproductqualityandincreasingdeliverytimes--Delayedpaymentstosuppliers(includinglenders)--Higherborrowingcosts--DecliningshareholdervalueBankruptcyplayskeyroleinminimizingthesecostsbyprovidingaprocessforresolvingtheseissuesinatimelymanner.BankruptcyApplicabletofailingfirmsAfirmistechnicallyinsolventifitisunabletopayitsliabilitiesastheycomedueAfirmislegallyinsolventifafirm’sliabilitiesexceedthefairmarketvalueofitsassetsDesignedto --Protectfailingfirmsfromlawsuitsbyitscreditorsuntildecisionmadetoshut-downorcontinuetooperatethefirm --ProvidecreditorswithanefficientmeansofrecoveringwhattheyareowedAfirmisnotconsideredbankruptuntilitoritscreditorspetitionthefederalbankruptcycourtVoluntaryReorganizationOutsideofBankruptcyCourtGenerallyoffersbestchanceforownerstorecoveraportionoftheirinvestmentUsuallyinitiatedbydebtorfirmbyrequestingrelieffromcreditorsSuchreliefoftenconsistsofthefollowing:Anextension:Creditorsagreetolengthenperiodduringwhichdebtorfirmcanrepayitsdebt.MayalsoincludeatemporarysuspensionofbothinterestandprincipalrepaymentsAcomposition:CreditorsagreetosettleforlessthanthefullamounttheyareowedDebtforequityswap:CreditorssurrenderaportionoftheirclaimsinexchangeforanownershippositioninthefirmVoluntaryLiquidationOutside

ofBankruptcyCourt

Ifcreditorsconcludeinsolventfirm’ssituationcannotbereorganized,liquidationmaybeonlycourseofactionIfinsolventfirmiswillingtoacceptliquidationandallcreditorsagree,legalproceedingsnotnecessaryCreditorsnormallypreferliquidationstoavoidlengthyandcostlylitigationReorganizationandLiquidation

inBankruptcyInabsenceofout-of-courtvoluntarysettlement,debtorfirmmaySeekprotectionfromcreditorsbypetitioningthebankruptcycourtorBeforcedintobankruptcybyitscreditorsBankruptcyallowscreditorfirmtostopallprincipalandinterestpaymentsandpreventssecuredcreditorsfromtakingpossessionoftheircollateralU.S.BankruptcyCode:Chapter11dealswithreorganizationandprovidesforthedebtortoremaininpossession,unlesscourtrulesotherwiseChapter7dealswithliquidationanddefinespriorityinwhichcreditorswillbepaidChapter15addressesinsolvencyissuesinvolvingassets,lenders,andotherpartiesinvariouscountriesProceduresforReorganizing

inBankruptcyFilingwiththeBankruptcyCourtAppointmentofDebtorinPossessionorCourtTrusteeDevelopandPresentReorganizationPlanAcceptanceofReorganizationPlanbyAllPartiesPaymentofCourtApprovedExpensesBankruptcyAbusePreventionandConsumerProtectionActof2005(BAPCPA)Pre-BAPCPA:Debtorinpossession(DIP)hadexclusiverightforfirst120daystofileareorganizationplanbeforecreditorscouldsubmittheirownplanCourtcouldatitsdiscretionprovideextensionsbeyond120daysLeasescouldbeextendedindefinitelyaslongaspaymentsmadePost-BAPCPA:LimitsDIPexclusivityperiodat18monthswithanadditional2monthstowincreditors’acceptanceofreorganizationplan,effectivelygivingDIPamaximumof20monthsbeforecreditors’cansubmittheirplan“Goodcause”leaseextensionslimitedto90daysPaymentstomanagementemployeescannotbemorethan10timesamountpaidtonon-managementemployeesPre-PackagedBankruptciesDebtornegotiatesreorganizationplanwithmajorcreditorswellinadvanceoffilingforChapter11ActualvotesforareorganizationplanmayalreadyhavetakenplacepriortothefilingSubsequentChapter11reorganizationaveragesafewmonthsascourtonlyhastoapprovetheplanMinoritycreditorsmayberequiredtoaccepttheplanbythecourtDebtormayloseNOLsifoutofcourtsettlementreachedinwhichcreditorsexchangetheirdebtforequityandoriginalshareholdersownlessthan50percentoffirm.Inbankruptcy,debtormayclaimNOLsSo-called“pre-negotiatedorpre-arrangedbankruptcies”differfrompre-packagedbankruptciesinthatactualvotesoragreementstovotehavenotyetbeenreachedwiththemajorityofcreditors,althoughagreementhasbeenreachedwiththosecreditorsdeemedcriticaltotheprocessBuyingAssetsfromaFirminChapter11Providesopportunitytoacquirevaluableassets“freeandclear”ofliabilities.ManyChapter11proceedingsundertakentofacilitatethesaleofadebtor’sassetsorongoingbusiness.3waystobuyassetsfromafirminbankruptcyAspartofacourtapprovedplanofreorganization;Fromapost-confirmationliquidatingtrust;1orUnderSection363oftheU.S.BankruptcyCodeSo-called363saleshavebecomeincreasinglypopularwaysofsellingassetswhentimeiscritical1OnceapprovaloftheChapter11planofreorganizationhasbeenconfirmedbythecourt,suchtrustsareestablishedtodisposeofanyassetsnotincludedintheplan.Section363BankruptcySectionoftheU.S.BankruptcyCodeallowingafirmtoenteracourt-supervisedsaleofassets(usuallyatauction)asthebestmeanstoprotectvalue.Unliketypicalbankruptcies,firmsmayemergein30-60days.Initialprospectivebuyersetstheinitialpurchasepriceandtermsandnegotiatesa“break-up”or“toppingfee”tobepaidifitisnotthesuccessfulbidder.Oftenreferredtoasa“stalkinghorse,”initialbiddermayconcealtheactualbuyer.“Creditbids”occurwhensecuredcreditorsproposetobuytheassets.Suchbidderscanbiduptotheamountofthedebtowedbeforeofferinganycash.Opponentsofsalehave10-20daystofilewrittenobjections;althoughtheperiodmaybeshortenedtoafewdaysbythebankruptcyjudge.Requirements:BankruptcyjudgemustdecideifNegotiationsconcerningsalemustbeconductedatan“armslength”SaleinbestinterestsofallstakeholdersPurchaseractingin“goodfaith”BankruptcyjudgedecideshowsaleproceedsdistributedamongsecuredcreditorsExamplesof363SalesfromChapter11GeneralMotorssaleofselectedassetsin2009:GMsplitintotwocompanies,onecontainingthe“goodassets”andtheotherconsistingoftheremainingassets.ThenewGMconsistsof4brands:Chevrolet,GMC,Buick,andCadillac.Ownershipdistributioninthenewcompanyisasfollows:U.S.government(60%)1,UAW(17.5%)2,OntarioandCanadiangovernments(12.5%)3,andbondholders(10%).4Chrysler’ssaleofmostofitsassetsin2009:ChryslerLLCsoldtoanewcompanymanagedbyFiatthatwilloperateasChryslerGroupLLC,consistingoftheChrysler,Jeep,DodgeandMoparbrands.Ownershipdistributionofthenewcompanyisasfollows:UAW'sVEBA(55%),Fiat(20%growingto35%oncecertainmilestonesachieved);the

USGovernment(8%),andtheCanadiangovernment(2%).Absolutepriorityrule5mayhavebeenviolatedinthattheUAWreceivedforitspensionobligations(anunsecuredclaim)amuchhigherownershipstakethanthevalueofthecashreceivedbysecuredcreditors(i.e.,$.29onthedollar).1U.S.governmentagreedtoforgiveallbut$9billionofits$49.5billioninloanstoGM2UnitedAutoWorkers(UAW)agreedtoforgive$20billionGMhadpledgedtostarttheVoluntaryEmployeeBeneficiaryAssociation(VEBA)andreceived$2.5billionincashand$6.5billioninpreferredstockpaying$585millioninannualdividends3OntarioandCanadiangovernmentsagreedtoforgiveallbut$1.7billonoftheir$9.5billioninloanstoGM.4Bondholdersagreedtoforgive$27.2billioninGMdebt.5Absolutepriorityruleinthefederalbankruptcycodestatesthatnounsecuredcreditorcanreceiveaninterestinareorganizedfirmbeforesecuredcreditorsarepaidinfullorarepaidafairdistribution..GeneralMotors’(GM)Bankruptcy

Pre-BankruptcyBankruptcyPost-BankruptcyConsolidatedGMU.S.&CanadianOperations1AllOtherInternationalOperations“OldGM:”UnattractiveAssets2AttractiveAssets“NewGM:”U.S.&CanadianOperations3ConsolidatedGM1OnlytheU.S.andCanadianoperationswereincludedintheGMbankruptcyfiling.2”O(jiān)ldGM”containstheunattractiveassetsoftheU.S.andCanadianoperationsinatrustsetupundertheprotectionofthebankruptcycourt.Theseassetsaretobeliquidatedbyacourt-appointedtrustee,withtheproceedsgoingtocreditors.3”NewGM”representsanewcorporationcontainingonlytheattractiveassetsheldbytheU.S.andCanadianoperationsandprimarilyownedbytheU.S.andCanadiangovernments,aUAWhealthcaretrust,andthecreditorsof“OldGM”AllOtherInternationalOperationsLiquidationinBankruptcyIfthebankruptcycourtdeterminesreorganizationnotfeasible,failingfirmmaybeforcedtoliquidatePriorityinwhichclaimsarepaid(perChapter7ofU.S.BankruptcyCode)PastduepropertytaxesSecuredcreditorsuptoproceedsofthesaleofpledgedassetsLegalfeesExpensesincurredafterinvoluntarycasebegunbutbeforetrusteeappointedWagesnottoexceed$2000perworkerUnpaidemployeebenefitplancontributionsupto$2000Unsecuredcustomerdepositsof$900orlessIncometaxesowedfederal,state,orlocalgovernmentsUnder-fundedpensionliabilitiesupto30%ofthefirm’sbookvalueUnsecuredcreditorsPreferredshareholders,uptoparvalueoftheirstockCommonshareholders,paidoutofremainingfundsChoosingAppropriateRestructuringStrategy:FailingFirmsChoiceheavilyinfluencedbythefollowing:GoingconcernvalueofdebtorfirmSalevalueofdebtorfirmLiquidationvalueofdebtorfirmImplications:Ifsalevalue>goingconcernorliquidationvalue,sellfirmIfgoingconcernvalue>saleorliquidationvalue,reachoutofcourtsettlementwithcreditorsorseekbankruptcyprotectionunderChapter11Ifliquidationvalue>saleorgoingconcernvalue,reachoutofcourtsettlementwithcreditorsandliquidateorliquidateunderChapter7Dodd-FrankActof2010:

OrderlyLiquidationAuthority(OLA)OLA:EnablesFDICtoseizeandliquidatesystemicallysignificantfirmsObjectives:ToEnsureAspeedyliquidationofsystemicallysignificantfirms;Lossesareborneprimarilybyshareholdersandcreditors;Lossestotaxpayersareminimized;andFirm’smanagementremovedandmaybesubjectto“clawback.”Wh