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(Revised from original 1991 version)
Southland Corp. (B)
Examines Southland's financial difficulties following the LBO in 1987 up to the first restructuring plan in July 1990. The teaching objectives are: to explore the complexities of a failed leverage buyout and the operating restrictions that result from financial distress, to recognize that financing decisions can restrict future flexibility, to examine the dynamics of a restructuring with particular focus on the role of new equity, and the payoffs received by pre-existing claimholders, and to explain the complexity of accomplishing a restructuring outside of bankruptcy.
Keywords: Leveraged Buyouts;
Insolvency and Bankruptcy;
Financing and Loans;
Ruback, Richard S. "Southland Corp. (B)." Harvard Business School Case 291-039, July 1994. (Revised from original April 1991 version.)