Creating Value Through Corporate Restructuring

An updated look at how corporate restructuring really works Stuart Gilson is one of the leading corporate restructuring experts in the United States, teaching thousands of students and consulting with numerous companies. Now, in the second edition of this bestselling book, Gilson returns to present new insight into corporate restructuring. Through real-world case studies that involve some of the most prominent restructurings of the last ten years, and highlighting the increased role of hedge funds in distressed investing, you'll develop a better sense of the restructuring process and how it can truly create value. In addition to "classic" buyout and structuring case studies, this second edition includes coverage of Delphi, General Motors, the Finova Group and Warren Buffett, Kmart and Sears, Adelphia Communications, Seagate Technology, Dupont-Conoco, and even the Eurotunnel debt restructuring. Covers corporate bankruptcy reorganization, debt workouts, "vulture" investing, equity spin-offs, asset divestitures, and much more Addresses the effect of employee layoffs and corporate downsizing Examines how companies allocate value and when a corporation should "pull the trigger" From hedge funds to financial fraud to subprime busts, this second edition offers a rare look at some of the most innovative and controversial restructurings ever.

Foreword xi Introduction xv Part One Restructuring Debt and Liabilities 1 Chapter 1 Investing in Distressed Situations: Strategies, Opportunities, and Risks 17 Chapter 2 Note on the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) 69 Chapter 3 Kmart and ESL Investments (A) 85 Chapter 4 Kmart and ESL Investments (B): The Sears Merger 115 Chapter 5 National Convenience Stores Incorporated 129 Chapter 6 Continental Airlines—1992 157 Chapter 7 Flagstar Companies, Inc. 185 Chapter 8 The Finova Group, Inc. 225 Chapter 9 Arch Wireless, Inc. 259 Chapter 10 Adelphia Communications Corp.’s Bankruptcy 291 Chapter 11 Buenos Aires Embotelladora S.A. (BAESA): A South American Restructuring 341 Chapter 12 Alphatec Electronics PCl 377 Chapter 13 Groupe Eurotunnel S.A. 417 Chapter 14 Delphi Corp. and the Credit Derivatives Market 447 Part Two Restructuring Equity and Assets 473 Chapter 15 Humana Inc.: Managing in a Changing Industry 487 Chapter 16 USX Corporation 511 Chapter 17 E.I. du Pont de Nemours and Company: The Conoco Split-off 535 Chapter 18 Seagate Technology Buyout 561 Chapter 19 The Loewen Group Inc. 587 Chapter 20 Donald Salter Communications Inc. 617 Part Three Restructuring Employees’ Claims 641 Chapter 21 Restructuring at Delphi Corporation 651 Chapter 22 Navistar International 683 Chapter 23 Scott Paper Company 713 Chapter 24 UAL Corporation 747 Appendix A Closing the Value Gap: A Simple Framework for Analyzing Corporate Restructuring 781 Appendix B Valuing Companies in Corporate Restructurings: Technical Note 785 About the Author 803 Index 805