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• Case | HBS Case Collection | March 2016 (Revised February 2019)

  Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover

  Stuart C. Gilson and Sarah L. Abbott

  In early 2013, Central European Distribution Corporation (CEDC), a large publicly traded producer and distributer of vodka and spirits in Eastern and Central Europe, has suffered significant declines in its financial performance, is at risk of defaulting on its debt, and is under pressure from its largest shareholders to give them control of the board and to restructure its debt to avoid bankruptcy. The largest shareholder, billionaire Russian investor Roustam Tariko, has proposed an out of court exchange offer for CEDC's publicly traded bonds and investment in CEDC's stock that would give him full ownership of the company. If the exchange offer fails, the company will file for prepackaged Chapter 11 bankruptcy in the United States.

  Keywords: Hostile takeover; corporate governance; restructuring; Accounting restatement; Activist shareholder; Restructuring; Mergers and Acquisitions; Financial Statements; Corporate Governance; Investment Activism; Distribution Industry; Food and Beverage Industry; United States; Russia; Europe;

  Citation:

  Gilson, Stuart C., and Sarah L. Abbott. "Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover." Harvard Business School Case 216-059, March 2016. (Revised February 2019.)  View Details

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• Case | HBS Case Collection | January 2017 (Revised January 2019)

  The Rise and Fall of Lehman Brothers

  Stuart C. Gilson, Kristin Mugford and Sarah L. Abbott

  With nearly $700 billion in assets, Lehman was the largest U.S. bankruptcy in history. In 2007, Lehman achieved record earnings of over $4 billion on revenues of $60 billion. By September 2008 the fourth largest investment bank in the world was bankrupt. How had a successful investment bank with a long and storied history effectively disappeared overnight? This case reviews the decisions made by Lehman’s management, board and government regulators leading up to September 2008 to understand the factors that contributed to this historic event and the choices that might have led to a different outcome. Lehman had an aggressive CEO in Dick Fuld; a “countercyclical” growth strategy; a firm culture that rewarded risk; questionable accounting policies; never before seen levels of market volatility; and a high leverage business model employed by many investment banks. On the fateful “Lehman weekend” of September 13, 2008 the most senior leaders within Treasury, the NY Fed, and the SEC chose not to bail out Lehman and instead advised Lehman’s board to “take action”. In 2010 court-appointed examiner Anton R. Valukas released a landmark 2,200 page report based upon a review of over 34 million documents and 300 interviews to try to understand what happened and the lessons for the future. His findings serve as a basis for this case.

  Keywords: bankruptcy; financial distress; Accounting policies; Business ethics; Financial Reporting; Volatility; Judgments; Financial Crisis; Insolvency and Bankruptcy; Financial Liquidity; Investment Banking; Financial Management; Financial Strategy; Corporate Accountability; Corporate Disclosure; Corporate Governance; Crisis Management; Risk Management; Failure; Business and Government Relations; Ethics; Banking Industry; New York (city, NY);

  Citation:

  Gilson, Stuart C., Kristin Mugford, and Sarah L. Abbott. "The Rise and Fall of Lehman Brothers." Harvard Business School Case 217-041, January 2017. (Revised January 2019.)  View Details

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• Technical Note | HBS Case Collection | December 2018

  Note on Economic Inequality (2018)

  Rebecca Henderson, Clayton S. Rose, Jessica A. Gover and Aldo Sesia

  For over half a century, most of the world's economies have enjoyed steady growth and prosperity. While this economic growth has reduced the number of people living in poverty, it has come with an increase in economic inequality. The gap between the "haves" and the "have-nots" in developed countries has widened, with a small proportion of the population reaping an increasingly larger share of a country's economic rewards. This growing economic inequality has been particularly pronounced in the United States, but the phenomenon has also occurred in many nations. This note provides background on aspects of economic inequality. It begins by describing both income inequality and wealth inequality, providing an explanation of two widely used metrics and data that show increasing inequalities over time. It then moves to the factors that might contribute to this inequality, as well to propositions of economic and social consequences that might result from the widening gap. Finally, it addresses the issue of "equality of opportunity" or social mobility. This is an update to the Note on Economic Inequality (2015). It provides additional information on economic inequality, including union membership and inequality and political polarization.

  Keywords: Economic inequalty; wealth inequality; equality of opportunity; political polarization; Economic Growth; Economics; Equality and Inequality; Society; Problems and Challenges;

  Citation:

  Henderson, Rebecca, Clayton S. Rose, Jessica A. Gover, and Aldo Sesia. "Note on Economic Inequality (2018)." Harvard Business School Technical Note 319-071, December 2018.  View Details

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