In the summer of 2006 the chairman and CEO of Eurotunnel Group is faced with the decision whether to file for bankruptcy protection, after having failed to acquire creditor approval of a challenging out-of-court restructuring plan. The firm, which has been trying to restructure its debt and operations for the last ten years, faces a number of daunting challenges. Eurotunnel is jointly recorded in the U.K. and France, and its shareholders, who are mostly based in France, confront the prospect of substantial dilution under any restructuring strategy.
The current chairman and CEO has been with the company for just a year-and-a half, following a decade of senior management turbulence in which the company has seen nine distinct CEOs and chairmen. Eurotunnel's capital structure is staggeringly complicated, and a big fraction of its debt has come to be held by U.S.-based hedge funds that specialize in investing in distressed firms. Finally, Eurotunnel's business is extremely challenging to value, and is faced with rivalry that is critical. If the current chairman/CEO determines to file for bankruptcy, he faces the added option whether to file for bankruptcy in the U.K. or in France, which take quite different approaches to restructuring troubled businesses.
PUBLICATION DATE: March 03, 2009 PRODUCT #: 209113-PDF-ENG
This is just an excerpt. This case is about FINANCE & ACCOUNTING
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