Corporate Finance

Finance Roundup for Executives

Be informed, get involved, and shape the world through finance. Read CFO.com's most recent headlines and standout stories.
Kerry MarunaMarch 30, 2016

Standout Stories

Debtor-in-possession financing… When a company enters Chapter 11 bankruptcy protection and wants debtor-in-possession (DIP) financing from a bank or permission to spend proceeds of accounts receivable that have been pledged (that is, use cash collateral), it needs the bankruptcy court’s approval. A key part of the debtor’s request is a budget, which typically covers 13 weeks.

The debtor will try to show that it can pay claims that arise after the case commences that have administrative status. However, some pre-bankruptcy claims have administrative status, too — including vendor claims for goods received by the debtor within the 20 days before bankruptcy. This is a relatively new provision, aimed at discouraging the debtor from “loading up” — that is, taking in a lot of goods right before bankruptcy. Read article.

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Mega deals and their effect on accounting rules… AB InBev’s offer to purchase competitor SABMiller for $106 billion casts a spotlight on a flawed accounting rule that may confuse investors about the post-deal worth of companies that make acquisitions.

If the AB InBev-SABMiller deal is approved by regulators and concluded, AB InBev will be obliged by accounting standards for business combinations to provide a breakdown of the intangibles that comprise the whopping $86.2 billion premium being offered. Read article.


Headlines

 

NTT Data Buys Dell For $3.05 Billion

Like many Japanese companies, NTT Data is seeking growth overseas to make up for slow growth in their country.

 

Iranian Hacker Used Google To Hack N.Y. Dam Computer

By “Google dorking,” hackers can use certain search parameters to find unprotected computers.

 

Warren Buffett Invites Fed Scrutiny with Wells Fargo Investment

After increasing his stake to 10%, the Federal Reserve may take a closer look at his dealings with the bank.

 

Tribune Publishing Dumps CFO, Auditor

Weak internal controls sealed the fate of the finance chief and auditor PwC.

 

A Key for Getting Debtor-in-Possession Financing

A company in Chapter 11 must show it can pay “administrative claims” by creditors in order to qualify for DIP financing.

 

Proposed Mega-Deal Underscores Flawed Accounting Rule

If AB Inbev does acquire SABMiller, the company’s accounting won’t be able to show any future gains in the value of the target’s brands.

 

Coalition Urges Treasury to Rein In Corporate Inversions

The Financial Accountability and Corporate Transparency Coalition decries a potential erosion of the corporate tax base.

 

Class-Action Settlements Reach Five-Year High

The large number of settlements in 2015 reflected the fact that 189 new securities class actions were filed, the most since 2008.

 

Yellen Dampens Expectations for April Rate Hike

With readings on the U.S. economy “mixed” since the start of the year, the Federal Reserve will continue to “proceed cautiously.”

 

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