1. Summer 2009 URG MBA Program Chapters 15-17

2. M & A – Mergers and Acquisitions Classic Mergers Triangular Mergers Subsidiary is formed specifically for merger Creates a legal corporate “veil” Reverse triangular merger is the opposite From last week: http://www.businessweek.com/technology/content/jun2002/ tc20020617_5587.htm

3. Sale and Acquisition of Assets Preservation of legal entity Selective transfer of assets Proceeds remain in the company Negotiated Inapplicability of the securities law No direct effect on management Management Strategy is in place from both sides

4. Payment of Merger or Acquisition Cash for shares Cash for assets Stock for stock Stock for assets Price must be determined (biggest sticking point) Stock based payment is cheap and has tax advantages

5. Summer 2009 URG MBA Program Chapter 18

6. Bankruptcy Chapter 7 – Company is liquidated Assets are sold Investors enjoy a priority over others Chapter 11 Company reorganizes Payment of debt is halted until reorganization is complete Free ticket from bills for a period of time while income continues—what a deal

7. Dissolution Different states have different rules Accounting changes Sales change, etc. Delay of shareholder distribution could be up to 210 days