December 29, 2007
Hard Lesson for Harvey Electronics
Harvey Electronics filed for Chapter 11. The cause of its distress was a failed merger negotiation that led to "distractions" and increased professional fees. As a result of the failed negotiation the credit markets lost confidence in the company and increased its borrowing costs, its stock dropped to below $1 and it lost its NASDAQ listing, and it triggered the default clause in its senior borrowing agreements. The last event forced filing Chapter 11. The lesson: a failed merger negotiation, once publicly announced and far along, can have heavy, heavy costs for a company.
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thanks good information
Posted by: criminal law elements | Dec 30, 2007 6:55:56 AM
"The lesson: a failed merger negotiation, once publicly announced and far along, can have heavy, heavy costs for a company." Worth remembering when negotiating a merger or take-over with a company on the edge. Don't push them too far, or the whole deal falls through and only the 'professionals' profit. There was good money to be made here, but once the spiral of events was set off, the dominos could not be stopped. So sad.
Posted by: Calum (Negotiation Courses are the Cure) Coburn | Jan 14, 2008 4:26:26 AM