Why this presented great problems for campeau organization

Assignment Help Finance Basics

Reference no: EM131410617

The following quote refers to the problems of Campeau Corporation, a Canadian-based retail empire that later declared bankruptcy. At the time, Campeau's department store chains included Bloomingdale's, Rich's, Burdines, Abraham & Strauss, and Lazarus.

Campeau Corp.'s announcement Friday that its bankers believe it has technically defaulted on $2.34 billion in debt probably will freeze new spring shipments, apparel makers say. Citibank, leader of the bank syndicate providing much of Campeau's debt financing, informed Campeau by letter last week that Campeau had violated certain covenants on debt and unless Campeau can remedy the default by December 31, Citibank stated it may demand full repayment of the loans.

REQUIRED:

a. What is a "technical default," and how did Citibank react to it?

b. Explain why apparel makers might "freeze new shipments" and why this presented great problems for the Campeau organization.

Reference no: EM131410617

Questions Cloud

What might be some of the challenge related to empty nesters : What are some of the different components that one might need to consider during the empty nest stage? What impact can this have on a marriage? What might be some of the challenges related to empty nesters?

Develop a reward system that recognizes diversity : Discuss employee motivation as it relates to culture, and consider how you might develop a reward system that recognizes diversity and is equitable and legally sound. Support your recommendations with scholarly references.

Explain three methods you will use for assessing students : Recommend and explain three methods you will use for assessing students on the content of your unit and align each with your objectives and students.

Review the theory of supply and demand : Review the theory of supply and demand. How do skimming and penetration pricing strategies influence a product's supply and demand?

Why this presented great problems for campeau organization : The following quote refers to the problems of Campeau Corporation, a Canadian-based retail empire that later declared bankruptcy. At the time, Campeau's department store chains included Bloomingdale's, Rich's, Burdines, Abraham & Strauss, and Laza..

Do you tend to take a wait and see attitude : Do you consider yourself an early adopter when it comes to trying out new products or new fashions, or do you tend to take a wait-and-see attitude?

Discuss the sharing economy from a supply and demand : Discuss the sharing economy from a supply and demand standpoint. How do companies like Uber and Airbnb affect supply and demand in the markets for shared rides (taxis, limos, etc.) and rented rooms, respectively?

How does this benefit connect to family race and class : How does this compare or contrast from the understanding of education from a social conflict perspective? Who benefits more according to this view? How does this benefit connect to family, race, and class

Discuss philip morris’s disclosure : Discuss Philip Morris's disclosure and accrual in terms of (1) the methods used to account for loss contingencies, and (2) the potential economic consequences associated with the disclosure and accounting treatment.

User Account

All Pages