Williams Case

Williams is currently in financial trouble for a number of reasons. For starters their telecommunications business folded due to unforeseeable market conditions. They also accrued a majority of their debt at the hands of their subsidiary company WCG, and because of it they’re struggling financially.

The terms of Berkshire-Lehman’s proposal guarantees the Williams Company will receive $900 million in exchange for preferred stock and various oil and gas assets. I like the deal for Williams because it improves their financial position, provides wiggle room to pay off some of its billion-dollar debt, and prevents them from filing for bankruptcy. One of my issues with the deal stems from Williams relinquishing over $2 billion worth of its best assets and in return only securing a loan not even worth half the amount of those possessions. The restrictions of the deal limit the redemption of capital stock for Williams. By restricting the firm’s redemption of capital stock it prevents them from selling reacquired stock and also prevents them from issuing any stock options to employees.

The proposed deal of Berkshire-Lehman is a little on the expensive side in a sense because as stated previously they had to give up $2 billion dollars worth of valuable assets without receiving equivalent compensation for them. The terms of the financing deal grants creditors an immense amount of power including having “attendance rights to all board of directors meetings, as well as any meetings of any committees of the board” (Pg. 143).

California Pizza Kitchen

Company Background:

White-collar criminal defense attorneys Larry Flax and Rick Rosenfield in Beverly Hills, California created California Pizza Kitchen in 1985. Famously known for its hearth-baked barbecue-chicken pizza, the “designer pizza at off-the-rack prices” concept thrived. Over the last twenty years, the company has expanded into 213 locations in 28 states and 6 foreign countries. Although approximately 41%...