Case | HBS Case Collection | November 1989 (Revised March 2000)

Wisconsin Central Ltd. Railroad and Berkshire Partners (A): Leveraged Buyouts and Financial Distress

by Michael C. Jensen, Willy Burkhardt and Brian Barry

Abstract

Wisconsin Central Ltd. is a regional railroad formed in a leveraged buyout, which is currently in default on its loan covenants. The case uses this situation to examine the financial structure of a typical LBO association and its internal control mechanisms and distinct role of the board of directors.

Keywords: Financial Management; Governing and Advisory Boards; Leveraged Buyouts; Financial Condition; Financing and Loans; Corporate Finance; Rail Industry;

Citation:

Jensen, Michael C., Willy Burkhardt, and Brian Barry. "Wisconsin Central Ltd. Railroad and Berkshire Partners (A): Leveraged Buyouts and Financial Distress." Harvard Business School Case 190-062, November 1989. (Revised March 2000.)