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• Case | HBS Case Collection | January 2017 (Revised May 2018)

  The Rise and Fall of Lehman Brothers

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

  The September 2008 bankruptcy of Lehman Brothers was the largest in U.S. history. In 2007, Lehman achieved record earnings. What happened? Who is to blame?

  Keywords: bankruptcy; financial distress; Accounting policies; corporate accountability; 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 May 2018.)  View Details

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• Supplement | HBS Case Collection | December 2017 (Revised April 2018)

  Tesla Motors (B): Merging with SolarCity

  Stuart C. Gilson and Sarah L. Abbott

  In 2016, electric car manufacturer Tesla announced that it was making an offer to acquire solar panel manufacturer SolarCity in an all-stock offer worth $2.6 billion in Tesla stock. Tesla’s co-founder and CEO, Elon Musk, believed that the merger would generate significant cost and revenue synergies, based on his vision of the future of transportation, energy storage, and a “green” economy. However, most Wall Street analysts were highly skeptical of the deal, voicing concerns that the merger would burden Tesla with excessive debt and that Musk was using the deal to advance his personal interests (at the expense of public shareholders) and bail out Tesla. Concerns were raised over possible conflicts of interest, given that Musk owned over 20% of the stock, and sat on the board of directors of both companies. The viability of the merger was also questioned given that neither Tesla nor SolarCity had ever been profitable.

  Keywords: valuation; M＆A; M＆A Valuation; Investing; equities; Equity; Valuation; Mergers and Acquisitions; Auto Industry; Energy Industry; United States;

  Citation:

  Gilson, Stuart C., and Sarah L. Abbott. "Tesla Motors (B): Merging with SolarCity." Harvard Business School Supplement 218-038, December 2017. (Revised April 2018.)  View Details

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• Case | HBS Case Collection | April 2018

  Sabine Oil & Gas Corporation

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

  In 2016, a trial began to determine the future of Sabine Oil & Gas Corporation’s $3 billion chapter 11 reorganization plan. The plan called for first and second lien secured creditors to receive new claims representing approximately 98% of the reorganized company’s enterprise value, leaving unsecured creditors, owed $1.4 billion, to recover less than two cents on the dollar. The plan had the support of the secured creditors, but unsecured creditors were strongly opposed. At the heart of the unsecured creditors’ objections to the plan was a dramatically different view on valuation. How much were Sabine's oil and gas reserves worth today? How much were they worth at the time Sabine filed for chapter 11? And, based on these valuations, what was a fair recovery for Sabine's creditors?

  Keywords: corporate reorganization; chapter 11; oil ＆ gas; restructuring; bankruptcy; bankruptcy reorganization; Insolvency and Bankruptcy; Energy; Restructuring; Valuation; United States;

  Citation:

  Gilson, Stuart C., Kristin Mugford, and Sarah L. Abbott. "Sabine Oil & Gas Corporation." Harvard Business School Case 218-004, April 2018.  View Details

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