Case | HBS Case Collection | September 1991

Kaiser Steel Corporation, 1984

by Timothy A. Luehrman

Abstract

In 1984, Kaiser's shareholders were asked to approve a complicated leveraged buyout of the company. Students are asked to analyze the proposed transaction and make a recommendation. To do this, they must determine who gets what in the deal, whether and how any value is created, whether the post-buyout firm is solvent and adequately capitalized, and how much the newly issued preferred stock is worth. Examines the bankruptcy of the company and the allegations of fraud that followed the 1984 LBO. May be used with Kaiser Steel Corp.--1987.

Keywords: Leveraged Buyouts; Capital; Value Creation; Insolvency and Bankruptcy; Steel Industry;

Citation:

Luehrman, Timothy A. "Kaiser Steel Corporation, 1984." Harvard Business School Case 292-028, September 1991.