| HBS Case Collection
(Revised March 2013)
High yield bond fund Proventus Capital Partners (PCP) has invested in underwater bonds issued by Preem, a large oil refinery. As maturity approaches, in the midst of financial crisis, Preem appear unlikely to be able to refinance. Meanwhile, Prreem has a complicated multi-currency capital structure with both senior, secured bank loans and junior bonds. PCP has to decide whether to push for bankruptcy in a European court, or to push for out of court renegotiations. The case is a tool for studying the difference between liquidity problems and solvency problems, weighing bankruptcy vs. out of court restructuring, and dealing with negotiations between creditors.
Keywords: Insolvency and Bankruptcy;
Courts and Trials;
Becker, Bo, Annelena Lobb, and Aldo Sesia. "Preem (A)". Harvard Business School Case 213-008, August 2012. (Revised March 2013.)