Immersion Learning

So How Much Does a Roller Coaster Cost?

by Femi Enigbokan ‘14 (6/2/13)
Femi Enigbokan ‘14

Restructuring is the act of reorganizing the legal, ownership, operational, or other structures of a company for the purpose of making it more profitable, or better organized for its current needs.  Restructuring may also occur as a result of a change of ownership or ownership structure, demerger, or a response to a crisis or major change in the business such as bankruptcy, re-positioning, or buyout.

The other day my classmates and I were treated to an intimate presentation by the guru of restructuring himself, Barry Ridings ‘76, managing director and vice chairman at Lazard Freres & Co. LLC.  Mr. Ridings’ presentation on the restructuring business was one of the most exciting, interesting presentations of the investment banking immersion program. During his presentation, he pulled in interesting anecdotes from his 35-plus year career, including how he co-founded Lazard’s industry leading restructuring practice. Mr. Ridings was extremely candid and shared his outlook on the short and long-term future of the investment banking industry, alluding to his numerous experiences with debt and equity offerings, mergers and acquisitions, and corporate restructurings.

Mr. Ridings kicked off the conversation with the question above, “So how much does a roller coaster cost?” Using Six Flags as a proxy for the restructuring conversation, he discussed his role in the valuation of Six Flag’s bankruptcy, even sharing some interesting, if not comical, stories about the transaction. He told of the complexities, and the supreme attention to detail, required to successfully present a restructuring valuation case in front of a Federal Judge with other top investment bankers on opposing sides.

Since we recently completed a SeaWorld valuation using Six Flags as a comparable, my classmates and I were chomping at the bit to begin the Q&A session with Barry Ridings. Valuation is half art, half science, half experience (I know), and Mr. Ridings’ experiences proved invaluable. We asked questions about his numerous restructurings, and we spent some time discussing his most famous advisory engagements, including the Lehman Brothers restructuring. In a few hours we learned more about bankruptcy proceedings, how to explain banker valuation techniques to Federal judges, and about how to know exactly what order to present one’s case in a Federal proceeding, than we had learned in all our previous reading and research over the semester. It was an amazing conversation, and my classmates and I felt much more informed about the various facets of investment banking because of it.  As we begin our summer internships, I am confident that we are up for the challenge!

So how much does a Six Flags roller coaster cost?  $100 million—yes, I’m sure you guessed correctly.