In late May 1997, Felicia Miranda with the Securities and Exchange Commission saw another leveraged recapitalization transaction to pass her desk. She wondered whether the SEC would have to be more active in addressing the debt excluding recapitalization. Over the past two years, Miranda saw dozens leveraged recapitalization and understand the intricacies of good practice. However, she still believes that many of the suggestions I saw his office had one goal - prevention of goodwill. Miranda wondered whether the structure of leveraged recapitalization is commensurate with the economic realities of the transaction or transactions were simply borrowed funds in disguise? As a defender of the public in respect of the securities, she asked what the consequences for the remaining shareholders would be of such recapitalization. She knew that the hard and fast rules for such accounting practices were relatively unknown, and asks whether now is the time to come down with the authoritative Bulletin of the Commission, especially in light of FASB project on business combinations. "Hide
by Mary E. Burt, Jose Cotarelo Source: Stanford Graduate School of Business 20 pages. Publication Date: 06 May 1999. Prod. #: A176-PDF-ENG
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