Kmart and ESL Investments (A)

Posted: 1 Jun 2009

See all articles by Stuart C. Gilson

Stuart C. Gilson

Harvard Business School - Finance Unit

Sarah Abbott

Harvard University - Business School (HBS)

Date Written: May 18, 2009

Abstract

A major bankrupt retailer is poised to emerge from Chapter 11. Two activist hedge funds ("vulture investors") will own over 50% of reorganized Kmart's common stock, based on prior investments in Kmart's debt claims, and an infusion of new equity financing. The chapter 11 process has generated both costs and benefits for the company. Its future profitability, and the value of the reorganized business, are both highly uncertain.

Suggested Citation

Gilson, Stuart C. and Abbott, Sarah, Kmart and ESL Investments (A) (May 18, 2009). HBS Case No. 209-044, Harvard Business School Finance Unit, Available at SSRN: https://ssrn.com/abstract=1412806

Stuart C. Gilson (Contact Author)

Harvard Business School - Finance Unit ( email )

Boston, MA 02163
United States
(617) 495-6243 (Phone)
(617) 496-8443 (Fax)

Sarah Abbott

Harvard University - Business School (HBS) ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

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