A small start-up company must make additional investments to maximize its firm value. But the company owner will not make this investment unless she can renegotiate outstanding debt claims. Solving this “debt overhang” problem through negotiation is the focus of the case. In this context, students are exposed to a variety of issues: the nature of financial claims, bargaining and negotiation fundamentals, and agency costs of debt.
CitationDownload as .RIS
University of Virginia Darden School Foundation
Copyright © 2010 by the University of Virginia Darden School Foundation, Charlottesville, VA. All rights reserved.