medium · Corporate Credit Analysis distressed
A defaulted firm, Echo Electronics, has two possible paths. A going-concern reorganisation yields an EV of $450M (6.0x $75M distressed EBITDA). A liquidation path yields $320M.
If the firm has $400M in senior secured debt, what is the estimated recovery percentage for the secured class?
- 89%
- 71%
- 100%
- 80%
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