Restructuring and Insolvency

Module 8

Corporate Restructuring Strategy

Dr. Jan-Alexander Huber

The course provides an in-depth study of corporate restructuring, looking at the strategic, operational and financial restructuring of distressed firms:

1) Defining a viable competitive strategy for the fields in which the company wants to play. Here we will discuss major strategic frameworks and practical examples from different industries, and the disruptive forces affecting industries today. We will also evaluate tools for corporate portfolio management including mergers and spin-offs.

2) Redesigning the value chain to return to operational profitability. This involves detailed analysis of a company's markets, operations and cost structure, and the application of benchmarking and operational efficiency frameworks.

3) Refinancing and recapitalizing the company's balance sheet. We will use techniques for financial forecasting, valuing distressed companies, and deriving a feasible new balance sheet structure, and discuss the process of negotiating with corporate stakeholders, including senior and junior debt and equity holders, either in- or out-of insolvency proceedings.

4) Complementing the corporate view, the fourth module discusses financial restructuring techniques from the perspective of the capital markets, analyzing and valuing different securities of distressed issuers, and common hedge fund strategies for investing in distressed firms, such as capital structure arbitrage.

5) The fifth module of this course will discuss the recent European sovereign debt crisis and, within that context, mechanisms for resolving sovereign overindebtedness, and differences to corporate restructuring.

The course methodology combines traditional teaching and case work – students are encouraged to actively prepare and participate in solving the cases in class, building on their own diverse experiences.


Restructuring and Insolvency Law

Dr. Sven Prüfer, Dr. Franz Bernhard Herding

In order to navigate a company in a financial crisis, the captain must know the threatening shallows. The course is for this reason divided into two parts. An overview of German insolvency law will be given covering the following topics: (i) reasons for initiating insolvency proceedings, (ii) how does an insolvency proceeding evolve (including insolvency plan), (iii) interaction between the insolvency administrator, the company and its creditors (including enforcement and director's liabilities) and (iv) impact of European and international aspects on German insolvency law. After studying the law of insolvency, the second part of the course deals with the challenges and opportunities of a successful restructuring implemented in order to stabilize the company and to preserve value outside of insolvency proceedings. This part will focus on a financial restructuring using the typical tools such as standstills, fresh money, debtor warrants and debt equity swaps. Case studies form an integral element of the entire course. Students are encouraged to actively participate in class by making contributions as regards the insolvency law and restructuring experiences from their own jurisdictions.