Distressed M&A and Corporate Strategy: Lessons from Marvel Entertainment Group's Bankruptcy
Strategy & Leadership, Vol. 37, No. 4, pp. 23-32, 2009
Posted: 1 Jul 2009
Date Written: June 28, 2009
Purpose: This paper illustrates the viability of distressed M&A by way of case study utilizing the modern Graham and Dodd valuation approach.
Design/methodology/approach: The paper presents a distressed acquisition case study of the 1996 Marvel Entertainment Group (Marvel) bankruptcy. It draws on previously published Graham and Dodd methodological materials as well as a financial case study of Marvel that was prepared at the time. The valuation presented in this paper is the sole work of the author.
Findings: The case study supports the view that distressed M&A can be a viable corporate strategy alternative. It also demonstrates how a multi-layered valuation approach such as Graham and Dodd can be ideal for identifying value that may be hidden in the confusion and distress of bankruptcy.
Practical and research implications: The case study illustrates, first, the viability of distressed M&A as a corporate strategy alternative, and second, the valuation insights that the modern Graham and Dodd approach can produce in a distressed setting.
Originality and value: This is the first paper that we are aware that applies Graham and Dodd-based distressed M&A valuation to corporate strategy.
Keywords: vulture-investing, distressed M&A, Graham and Dodd, Marvel Comics bankruptcy
JEL Classification: G34, L20
Suggested Citation: Suggested Citation