In 1987, Paramount Equipment, Inc. was founded in Fort Wayne, Indiana, and now it succeeded to extend its operations in 24 other countries' markets. It had been manufacturing food service equipment, aerial work platforms, and cranes and construction equipment. In contrast to the intensity of risk in the business, the company took a significant debt from the bank loans that ultimately lost its standing position in the market. To restructure the debt, it was necessary to find the new sources of funding and guarantees. The current lenders and the senior executives of the company needed to develop a viable restructuring plan for finance quickly to ensure Paramount sustainability for the future, but whether the management would be successful in diverting new investors towards the Paramount. The case asks students to examine different tools for financing a company that already struggling in finance and to determine the lucrative capital structure model consistent with available risks and it requires students to conduct only the limited quantitative analysis. It would enhance the understandings of students in courses of advanced undergraduate finance that cover capital structure and financial distress and would also be beneficial for MBA first year courses in financial strategy or corporate finance.
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