Why Did Marvel file for Chap. 11?
...ons that benefit the McAndrew & Forbes vs. Marvel. Managing ownership % of Marvel to take advantage of potential operating losses for tax purposes. • Stock Repurchase by issuing more debt: 1. Marvel Holdings - Issued $517M (286.6) of zero coupon secured by stock 2. Marvel Parent Holdings - $251.7M (145) zero’s secured by stock 3. Marvel III - $125M senior secured debt – used to repurchase equity to get Andrews ownership above 80% for consolidation. • With faltering earnings, continued acquisistions. Skybox - $150M. purchased with an additional $190M in debt. Lead to a downgrade by S&P from B to B-. • Expenses as % of Revenue increased at a dramatic rate. • Signals – Call to Putnam and Fidelty about potential restructuring. Sold $70M. Bad Luck: • Trading Card Sales Declining: Baseball and hockey strikes. Over-leverage: • D/E ratio analysis overtime. • Position taken by Bond Holders: “vulture investors” rejected Perelmans proposed workout, countered with alternative workout, which Perelman refused. 1.) Time...