Causes of financial distress following leveraged recapitalizations

Article Abstract:

A study of firms that completed leveraged recapitalizations (recaps) between 1985 and 1988 showed evidence of financial distress. These firms were found to have poor post-recap operating performance. Other observations include low levels of asset sales and a negative stock price reactions to events leading to the decline of the market for highly-leveraged transactions. The high level of distress can be attributed to unanticipated regulatory and macroeconomic developments.

Corporations, Corporate reorganizations, Corporate finance, Leveraged buyouts

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Ownership structure and top executive turnover

Article Abstract:

The ownership structure of American firms creates an impact with regards to the likelihood of top executive changes. The presence of an outside blockholder has a considerably strong effect on the possibility of top executive change while the ownership interests of officers and directors lessens the probability of turnover. Firms with managers owning a larger share of stock are less likely to engage in top executive changes due to stock price performance.

Management Policy & Goals, Management, Strategic planning (Business), Goal setting, Employee turnover

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Ownership and board structures in publicly traded corporations

Article Abstract:

Research was conducted on a sample of 583 companies by examining their board composition and equity ownership structure from 1983-1992. Findings suggest that a big number of firms are demonstrating changes in board structure and ownership in any year. Evidence also shows that there is a correlation between the changes. The changes are related to top executive turnover, corporate control threats and prior stock price performance.

Board of Directors-Functions, Economic aspects, Corporate directors, Property, Boards of directors

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