Leonard N. Stern School of Business

Corporate Financial Restructuring

Professor Ian Giddy

Prof. Ian Giddy

E-mail: ian.giddy@nyu.edu Web: http://giddy.org

Course Number: B40.2304.
Web site: http://www.stern.nyu.edu/~igiddy/restructuring.html


Corporate restructuring involves any substantial change in a company’s financial structure, or ownership or control, or business portfolio, designed to increase the value of the firm. This course will be taught around several major topics employing in-depth group work on case studies and deal documentation. The focus will be on identifying situations that call for nonstandard corporate finance solutions, and the design and pricing of the situation-specific financing instruments. Examples of such situations include stress-induced financial restructuring, recapitalizations, private equity and leveraged buyouts, mergers and acquisitions, and divestitures. In many cases resolving these issues will require structured finance solutions. Structured finance techniques include the design of debt, equity and hybrid financing techniques in order to resolve particular issuer or investor problems that cannot be solved by conventional methods.



Prof. Ian Giddy is a graduate of the University of Michigan (MBA 1972, PhD 1974) and the University of the Witwatersrand (BSc 1970). He has taught finance at NYU, Columbia, Wharton, Chicago and abroad for the past twenty-five years. He was Director of International Fixed Income Research at Drexel Burnham Lambert from 1986 to 1989. He is the author or co-author of numerous articles and books, including The Handbook of International Finance, The International Money Market, Cases in International Finance, Global Financial Markets, Asset Securitization in Asia and The Hudson River Watertrail Guide.


The course employs cases and problems as well as classroom lectures and discussions, and "live case studies" to offer a hands-on learning experience. We will make use of international as well as domestic examples. Each student will be expected to prepare thoroughly and to participate actively in class discussion. Material covered in the assigned readings will generally not be repeated in class. Rather, class time will be devoted to lecture and case discussion, applying the material covered in the readings.

The Course on the Internet

We will make use of the Internet for resource material and communication. Indeed this course outline itself will evolve: the definitive version is the Web site at www.stern.nyu.edu/~igiddy/restructuring.html . Online quizzes may be accessed through Blackboard.

Textbook and Cases

Donald DePamphilis, Mergers, Acquisitions and Other Restructuring Activities (Academic Press, 2nd ed.)
A package of articles and case studies from HBS Publishing (see course outline)
Other recommended books:
Patrick Gaughan, Mergers, Acquisitions and Corporate Restructurings (3rd ed, Wiley)
Stuart Gilson, Creating Value Through Corporate Restructuring (Wiley Finance)
Fred Weston and Samuel Weaver, Mergers and Acquisitions (Mc Graw-Hill)
Fred Weston, Kwang Chung, Juan Siu, Takeovers, Restructuring, & Corporate Governance (2nd Ed., Prentice-Hall)
Other readings may be downloaded from the links in the course outline below. More articles and applications could be added after the course gets underway.


The course grade will be determined by the instructor based on problem sets, written assignments and a final exam. Pop quizzes will be given in some classes. The weighting is as follows: problem sets 15%, individual assignments 10%, group assignments 10%,  pop quizzes (best 2 of 3) 25% and final exam 40%.

Additional Resources

The Wall Street Journal and the London Financial Times provide the most comprehensive daily coverage of restructuring and financing news. Other key resources for financial restructuring include Turnarounds and Workouts magazine and the Journal of Applied Corporate Finance .

Try the following Web sites:

Course Outline

Corporate Financial Restructuring







Introduction to corporate financial restructuring

Introduction to Restructuring  

Bowman et al, When Does Restructuring Improve Economic Value? (CMR141)

Handout 1

Compare restructuring at Conseco , Getronics and Dynegy
Trump Casinos & Cingular



Restructuring debt and equity to create corporate value

DePamphilis, Ch 1
Cost of Capital

Capital Structure

Handout 2

SAP (please update info and hand in your analysis today)
In-class group work: TDI A and B
(HBS 9-291-064 & 9-294-088)
Restructuring debt and equity to create corporate value
Debt Rating Estimation
Cost of Capital Data
Handout 3 & Guest lecture
TDI C and D
(HBS 9-296-035 & 9-297-085)
Group hand-in: Assessing TDI exit options
Mergers and Acquisitions: How much value added? Who gets it?
DePamphilis, Ch 3 & 10, AOL-TW (in Ch 1), AMP (in Ch 3)
Grading the Goldfield Poison Pill
Handout 4-5
Conrail (HBS 9-298-006)
Mergers and Acquisitions: When can they work?
DePamphilis, Ch 7 & 8
Corporate Reorganization
Merger Negotiation (team work)
Group deliverable: Deal analysis & term sheet
Leveraged recapitalizations
Recapitalizations and Exchanges
Handout 6
Sealed Air A (HBS 9-294-122)
Truck Toys and trucktoys.xls
Leveraged buy-out financing including mezzanine finance and high yield debt
DePamphilis, Ch 11
Leveraged Finance
Handout 7
Seagate and Le Meridien Hotels
Structuring a Management Buy-out
DePamphilis, Ch 9
Handout 8
John M. Case Company (HBS 9-291-008)
Group deliverable: Deal analysis & term sheet
Divestitures: Why and how
DePamphilis, pp 644-671
Handout 9
Tracking Stock
Marriott (HBS 9-294-090)
breakup.xls & marriott.xls
Bankruptcy and restructuring
DePamphilis, pp 671-689.
Note on Bankruptcy in the USA (HBS 9-292-062)
Handout 10
Loewen (HBS 9-201-062)
Optional: XO
In-class negotiation
Bankruptcy and restructuring
Gilson, Valuing Companies in Corporate Restructuring (HBS 9-201-073)
Handout 11
Zombie, Inc. (indiv. hand-in)
Marvel (HBS 9-298-059)
Equity variance data
Course Overview & Final Exam
Handout 12
2-hour, open-book exam
Sample questions
Sample Final
Suggested solutions

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