Bankruptcy and Restructuring at Marvel Entertainment Group

Benjamin C. Esty; Jason  Auerbach

Case | HBS Case Collection | September 1997 (Revised August 2007)

Bankruptcy and Restructuring at Marvel Entertainment Group

Abstract

Marvel Entertainment Group is the leading comic book publisher in the United States, with superheros like Spider-Man, the Incredible Hulk, the X-Men, and Captain America. It is also one of the leading manufacturers of sports and entertainment trading cards under the Fleer and Sky Box brand names. In the mid-1990s, it experienced sharp declines in both businesses, causing it to file for bankruptcy in December 1996. This case is set in late January 1997, shortly after Marvel filed its reorganization plan with the bankruptcy court and approximately one month before creditors will have to vote on the plan at the confirmation hearing. Two of the most prominent corporate raiders of the 1980s are pitted against each other for control of the company. On one side is Ronald Perelman, who controls Marvel through his MacAndrews & Forbes holding company. On the other side is Carl Icahn, who controls 25% of Marvel's public debt. Icahn and the other bondholders must decide whether to accept Perelman's plan, to reject it in favor of their own plan, or to sell their bonds before the confirmation hearing. Perelman must decide whether to change the plan in response to the debtholders' threats or to wait and see what happens at the hearing. A rewritten version of another case.

Keywords: Restructuring; Decision Choices and Conditions; Borrowing and Debt; Insolvency and Bankruptcy; Governance Controls; Courts and Trials; Planning; Entertainment and Recreation Industry;

Format: Print

19 pages

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Citation:

Esty, Benjamin C., and Jason Auerbach. "Bankruptcy and Restructuring at Marvel Entertainment Group." Harvard Business School Case 298-059, September 1997. (Revised August 2007.)

Teaching Note | HBS Case Collection | September 2020

TransDigm in 2017: The Beginning of the End or the End of the Beginning?

Benjamin C. Esty and Daniel Fisher

TransDigm was a highly acquisitive company that manufactured a wide range of highly engineered aerospace parts for both military and commercial customers. Over the ten years ending in 2016, its stock price had increase ten times, and both EBITDA and revenues had grown at compound annual rates in excess of 20%. But in early 2017, investors, customers, and government officials began to question the implementation, sustainability, and ethics of the firm’s unique value creation strategy. That strategy consisted of three parts: value-based pricing, cost reductions, and new product development. In the short term, CEO Nick Howley had to decide whether to respond to the barrage of criticism; in the longer term, he had to decide whether to change the firm’s highly successful strategy.

Keywords: value capturing; Pricing strategy; supplier power; buyer power; Porter's Five Forces; bargaining power; monopoly; aerospace; acquisition strategy; value drivers; ethical behavior; regulation; growth strategy; Business ethics; defense; procurement; sustainability; Value-Based Business Strategy; Acquisition; Ethics; Private Equity; Financial Strategy; Growth Management; Performance Evaluation; Business Strategy; Competitive Strategy; Horizontal Integration; Value Creation; Competitive Advantage; Aerospace Industry; Air Transportation Industry; United States;

Citation:

Esty, Benjamin C., and Daniel Fisher. "TransDigm in 2017: The Beginning of the End or the End of the Beginning?" Harvard Business School Teaching Note 721-353, September 2020. View Details

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In 2000, Eaton Corporation was a broadly diversified industrial conglomerate. But its strategy was evolving and its focus was narrowing around “power management” and more recently on “intelligent power,” the use of digitally enabled products and services designed to enhance efficiency and reliability. To implement this transition, Eaton had acquired more than 70 companies and divested another 50. Such active portfolio management required Eaton to regularly assess the prospects of each business unit—the profit and growth potential—and to explore opportunities to enhance its capabilities through acquisitions. In January 2020, Eaton got an offer from Danfoss, a Danish conglomerate, to buy its hydraulics business for $3.3 billion. Recently appointed CEO Craig Arnold must decide whether this deal makes sense strategically and financially. In particular, he must decide if $3.3 billion is a fair price for the firm’s hydraulics business.

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Bankruptcy and Restructuring at Marvel Entertainment Group

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