Stuart C. Gilson
Steven R. Fenster Professor of Business Administration
Stuart Gilson is the Steven R. Fenster Professor of Business Administration at Harvard Business School, where he has been on the faculty for more than twenty years. He is an expert on corporate restructuring, valuation, business bankruptcy, credit analysis, and corporate finance. He currently teaches a popular course in the MBA elective curriculum called Creating Value Through Corporate Restructuring, which analyzes the financial, operating, and legal strategies that companies use to create value and improve performance when they come under economic stress. Professor Gilson also has extensive experience teaching in Harvard’s Executive Education programs, including the Advanced Management Program, Finance For Senior Executives, and Corporate Restructuring, Mergers and Acquisitions (which he founded and chairs). He also provides focused training programs for a variety of companies and organizations on financial analysis, valuation, financial strategy, mergers and acquisitions, and corporate restructuring.
Professor Gilson has written on a variety of topics, including corporate restructuring, business valuation, investment strategies, and the informational efficiency of capital markets. His research has been published by leading academic and practitioner journals and has been cited by the national news media. His work has received a number of honors, including the prestigious Graham and Dodd Award for his article “Investing in Distressed Situations: A Market Survey.” Professor Gilson has also developed more than sixty Harvard Business School case studies and teaching notes on corporate restructuring, financial strategy, business valuation, mergers and acquisitions, and corporate finance. His case studies are widely used at other business schools, and have been published in the book Creating Value Through Corporate Restructuring: Case Studies in Bankruptcies, Buyouts, and Breakups (John Wiley & Sons), now in its second edition. He has been an associate editor of Financial Management and The Journal of Corporate Finance.
Professor Gilson has consulted to a variety of companies and organizations, and serves as a litigation expert on corporate valuation, restructuring, and bankruptcy. He is an academic affiliate of Cornerstone Research, a leading economic consulting firm that provides economic and financial consulting and expert testimony to attorneys in complex business litigation. He has served on the advisory boards of several for-profit and non-profit organizations, including the Turnaround Management Association and several investment funds. He has represented a creditor on the Official Unsecured Creditors Committee in the Chapter 11 bankruptcy of a major U.S. discount retailer. At Harvard Business School, he has served as faculty head of the Finance Unit. Prior to joining Harvard’s faculty, he was a professor at the College and Graduate School of Business at the University of Texas at Austin. He received his Ph.D. in Finance from the University of Rochester, New York. He lives with his wife in the town of Brookline, Massachusetts.
Corporate Restructuring and Business Insolvency: Economic Impact and Best Practices
Stuart C. Gilson is studying how severe financial distress impacts corporate policies and economic resource allocation. He is also studying how managers can best respond to financial distress in order to preserve and grow value. He is undertaking this research through a combination of field research and large-sample analysis. Much of his work focuses on the role of corporate bankruptcy law in the resolution of financial distress. His past research in this area has considered how management tenure and corporate governance are affected in firms that reorganize in Chapter 11. He has also studied what factors help or hinder the restructuring process and the likelihood of a successful reorganization. For example, he has shown that negotiations in Chapter 11 often break down because competing classes of claimholders come to the negotiations with widely divergent (and deliberately biased) estimates of what the firm is worth. In one ongoing project, he is studying how bankruptcy laws differ across a large sample of countries, to determine how (or whether) the characteristics of a country's bankruptcy laws affect managers' willingness to take risks. In another project, he is studying how efficiently priced are the debt and equity claims of firms in Chapter 11, in an attempt to understand how active trading in these claims (which has increased dramatically in recent years) affects the resolution of financial distress. Finally, he is studying bankrupt firms' increasing use of asset sales (through so-called "Section 363" transactions) to restructure their balance sheets (as opposed to traditional consenual reorganizations under Chapter 11 of the U.S. Bankruptcy Code).
Role of Information Intermediaries in Financial Markets:: How do Financial Analysts and the News Media Affect Firm Value?
Stuart C. Gilson is studying how information generated by financial analysts and the news media impacts corporate policies and economic resource allocation. He is also interested in understanding how managers can more effectively interact with such information intermediaries to increase their firms' market value. He is undertaking this research through a combination of field research and large-sample analysis. Much of this work examines the role of analysts and the media in the context of corporate restructuring, where firms can be especially difficult to value, and the impact of information intermediaries particularly great. His previous work in this area includes clinical studies of two controversial (but financially solvent) insurance companies whose large holdings of 'junk bonds' attracted biased and unfavorable media coverage, that ultimately drove both companies into bankruptcy. In another clinical study, he showed how biased and inaccurate coverage by financial analysts and the news media greatly complicated the efforts of United Air Lines to drastically cut its labor costs by giving employees company stock. In a large sample study, he found that firms that broke themselves apart through corporate spin-offs atracted wider (and higher quality) analyst coverage. In current on-going work, Gilson is studying a large sample of public companies to determine how newspapers report on corporate earnings announcements, and whether the accuracy and depth of such reporting can be related to certain identifiable characteristics of both the companies and the newspapers that cover them. In another study, he is evaluating the quality and content of the valuation analysis that financial analysts perform on companies that are about to break themselves apart through equity spin-offs.