by Prof. Ian Giddy, New York University
Background on TDI
William Apfelbaum, CEO of Transportation Displays, Inc., a company
that sells outboor advertising such as billboards and side-of-bus displays,
must restructure both the company's method of doing business and its liabilities
to keep it from bankruptcy. The four-part case study follows the company's
ups and downs and the means by which Apfelbaum seeks to renegotiate the contracts
and relationships with creditors, shareholders, management and customers.
TDA A & B (HBS 9-291-064
These two case studies follow the company from the time of its leveraged
buyout in 1986, through a restructuring effort in 1992-93. Please read the
cases and exhibits carefully, and be prepared to discuss the following questions:
- How did the initial leveraged buyout affect
the company's capital structure?
- When they provided the financing, what did the LBO lenders do
to protect themselves?
- After the company started to encounter
financial diffiiculties, Gotham Bank asked management to suggest alternative
restructuring solutions. Evaluate these, taking into account the interests
and restrictions of management, the banks and the outside shareholders.
- What operational, portfolio and financial restructuring proposals
were considered after the first (December 1989) restructuring?
- Compare the company's financial situation
before and after the 1992-93 restructuring.
TDI C & D (HBS 9-296-035
These two follow-up case studies trace
the company's improving financial condition in the early 1990's following
a leveraged buyout in 1986, and two debt restructurings during times of
financial difficulty. Please read the cases and exhibits carefully, and
be prepared to discuss the following questions:
- What alternatives were open to the company
to take advantage of its improved debt ratio after the business turnaround
engineered by the new management team? How would you evaluate the relative
merits of the alternatives? Be as specific as possible.
- How did the leveraged recapitalization
affect the company's capital structure?
- In the light of management's goals, evaluate the options open
to TDI in 1996. List the advantages and disadvantages of each option, considering
the effects on management and on shareholder value.
- In March 1996 TDI was sold to Infinity Broadcasting Corporation
for $300 million. Under what circumstances do you think this might have
been the wrong decision for shareholders? For management?