1) Business Restructuring and Bankruptcy
The reorganization of high profile companies such as Lehman Brothers, General Motors, American Airlines and Kodak, attracts much attention in the press, partly because each case projects significant ripples through the economy. The unprecedented pace of disruptive technological change is forcing fundamental and often unavoidable reorganization of established players in the marketplace. Yet, the corporate bankruptcy process (particularly Chapter 11) is a black box to many observers and is often misunderstood. This session explains the underlying principles of bankruptcy and provides a primer on bankruptcy rules and procedures that are used to shield debtors from their creditors, sell assets, renegotiate contracts, secure new financing and emerge under a reorganization plan.
2) Corporate Finance
This session will evaluate and deconstruct the key issues of corporate finance that confront directors and review how managers should make investment decisions and what tools capable directors (and journalists) might use to study and evaluate those decisions. Topics include simple and complex discounting, cash flow analysis; free cash flows, and the incorporation of probability analysis in investment decisions. Discussion will include the role of the cost of capital, how to measure the cost of capital, and how directors (and others) might think more clearly about risky projects. We will review the modern relevance of the various Modigliani-Miller (MM) financing propositions.
This session will cover what journalists should know about requirements for financial literacy by corporate board members. The purpose of the income statement is not to report income; once you understand this, you’ll have mastered the basics. Topics will include controversies over revenue recognition; the single most important understanding about cash flow analysis; how some lie with accounting statistics; the convergence of US GAAP with International Financial Reporting Standards (IFRS); the important measure of income that journalists hide from their readers; and wreaking havoc with executory contracts.