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Financial distress at Comercial Mexicana, 2008-2011

Carlos Omar Trejo-Pech (Universidad Panamericana at Guadalajara, Mexico and Purdue University, West Lafayette, Indiana, USA)
Susan White (University of Maryland, College Park, Maryland, USA)
Magdy Noguera (University of Idaho, Moscow, Idaho, USA)

Publication date: 10 September 2015

Abstract

Synopsis

Controladora Comercial Mexicana, a Mexican retailer, had successfully managed the bankruptcy process and was ready to emerge from its problems, primarily caused by speculation and excessive debt, and begin operations anew. Was the restructured Comerci capable of regaining its position as a premier retailer, and more importantly, was the firm capable of repaying the high level of debt that it carried following bankruptcy reorganization? How strong was the reorganized firm? Had Comerci truly left its problems behind in bankruptcy court, or would history repeat itself? How could Comerci raise funds needed for growth – through additional debt? Though asset sales?

Research methodology

This case was researched using publicly available information, including the company's financial statements, bankruptcy filings, news stories about the bankruptcy and financial data bases (e.g. ISI Emerging Markets, Economática, Capital IQ, etc.) to obtain information about the competitors and from financial analysts.

Relevant courses and levels

This case is intended for advanced undergraduate or MBA electives in finance. Students should have a basic understanding of valuation and financing before attempting this case. The case could also be used in a corporate finance or banking class to illustrate bankruptcy and credit risk, or could be used in an international business class to illustrate the differences between USA and international bankruptcies.

Keywords

Citation

Trejo-Pech, C.O., White, S. and Noguera, M. (2015), "Financial distress at Comercial Mexicana, 2008-2011", , Vol. 11 No. 3, pp. 287-305. https://doi.org/10.1108/TCJ-04-2014-0028

Publisher

:

Emerald Group Publishing Limited

Copyright © 2015, Emerald Group Publishing Limited

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