In the spring of 2008, the recession had decimated the c? Ur business, rental of construction equipment company. The economic crisis has led to a significant decrease in industrial activities and construction in North America and has hurt the company’s revenue and operating profit. Shares of the company fell rapidly to about $ 30 in mid to late 2007 to $ 3 in March 2009. In addition, two former CFOs of the company was accused of securities fraud and other violations, both by the prosecutor’s office in the United States and the SEC. The Council was faced with the resignation of founder and president, the problems of management succession, the failed merger with Cerberus, and the trial in Delaware. The Council was responsible for overseeing the development of a series of posts and the Board of Governors became increasingly difficult due to the crisis and the poor performance of the company. The recruitment and retention of talent in senior management and the board was critical to the success of the company, which was based on his team by a solid performance. In addition to the company’s total debt was approximately $ 3.3 billion, including $ 146 million of convertible subordinated bonds. Large debt of the company has the potential to have adverse consequences in a number of ways, including: increased vulnerability to the economy, industry or unfavorable ask the company to devote a significant portion of its cash flow to pay debt, reducing the funds for other purposes, which limits their ability to obtain additional financing, and reduce profitability or cash flows. And the company has always been plagued with alleged multiple class actions and derivative lawsuits were filed against him. It was at that time the board began looking for candidates for the two positions of CEO and chairman.
by
Jay W. Lorsch,
Kathleen Durante,
Emily McTague
Source: Harvard Business School
5 pages.
Release: September 25, 2013. Prod #: 414043-PDF-ENG
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