Case | HBS Case Collection | April 1991 (Revised July 1994)

Southland Corp. (B)

by Richard S. Ruback

Abstract

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; Restructuring; Equity; Insolvency and Bankruptcy; Financing and Loans; Crisis Management;

Citation:

Ruback, Richard S. "Southland Corp. (B)." Harvard Business School Case 291-039, April 1991. (Revised July 1994.)