Publicação
An integrated restructuring and liquidation case study of frontier communications
| Resumo: | This thesis examines Frontier Communications’ 2020 financial distress with a focus on liquidation outcomes and their implications for creditor recoveries. Using valuation-based recovery waterfalls, the analysis estimates stakeholder recoveries under a Chapter 7 scenario by constructing an asset-level liquidation model that incorporates recovery haircuts, administrative costs, and priority claims. The results indicate net liquidation values substantially below total liabilities, implying that recoverable value would be largely absorbed by secured and priority creditors. Under base-case assumptions, unsecured creditors receive limited recoveries, while equity holders are fully impaired. To contextualize these findings, liquidation outcomes are compared with restructuring-based alternatives, highlighting the extent of value destruction associated with forced asset sales. Sensitivity analyses show that recovery outcomes are primarily driven by fixed-asset realizations and liquidation costs, reinforcing the fragility of recoveries in downside scenarios. Overall, the thesis demonstrates that liquidation represents a lower-bound valuation benchmark and underscores the importance of capital structure design in determining creditor outcomes during financial distress. |
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| Autores principais: | Matos, Salvador Caetano |
| Assunto: | Financial Restructuring Financial distress Liquidation value Value recovery |
| Ano: | 2026 |
| País: | Portugal |
| Tipo de documento: | dissertação de mestrado |
| Tipo de acesso: | acesso aberto |
| Instituição associada: | Universidade Nova de Lisboa |
| Idioma: | inglês |
| Origem: | Repositório Institucional da UNL |
| Resumo: | This thesis examines Frontier Communications’ 2020 financial distress with a focus on liquidation outcomes and their implications for creditor recoveries. Using valuation-based recovery waterfalls, the analysis estimates stakeholder recoveries under a Chapter 7 scenario by constructing an asset-level liquidation model that incorporates recovery haircuts, administrative costs, and priority claims. The results indicate net liquidation values substantially below total liabilities, implying that recoverable value would be largely absorbed by secured and priority creditors. Under base-case assumptions, unsecured creditors receive limited recoveries, while equity holders are fully impaired. To contextualize these findings, liquidation outcomes are compared with restructuring-based alternatives, highlighting the extent of value destruction associated with forced asset sales. Sensitivity analyses show that recovery outcomes are primarily driven by fixed-asset realizations and liquidation costs, reinforcing the fragility of recoveries in downside scenarios. Overall, the thesis demonstrates that liquidation represents a lower-bound valuation benchmark and underscores the importance of capital structure design in determining creditor outcomes during financial distress. |
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