Unless otherwise defined, this refers to a special business of private equity funds. – Ailing, insolvent companies that have usually already been abandoned by the banks are provided with equity capital from the fund’s own resources, brought under the fund’s control and usually given new management. – This makes the company creditworthy again and it can obtain loans – sometimes from the fund itself. – Production continues again, and the employees keep their jobs. – This activity of the funds has been criticized because the funds are only concerned with creating financial value (accretion: increase in money value). This is true in essence. But restructuring preserves jobs, and (for what reasons; why?) companies that have floundered can, now restructured, become successful on the market again. – See cannibalization, burn-out turnaround, buyout capital, delisting, event-driven fund, greenmail, hedge fund loans, locusts, insolvency, insolvency costs, management buy-in, non-performing loans, raider, restructuring, rescue aid, vulture fund, insolvency.
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk
https://www.jung-stilling-gesellschaft.de/merk/
https://www.gerhardmerk.de/