AFM373 Lecture Notes - Lecture 10: Project Chariot, Dividend, Hospitality Industry

• School: University of Waterloo
• Department: Accounting & Financial Management
• Course: AFM373
• Professor: Alan Douglas

Document Summary

Marriott case is on the final exam for sure. Maintaining long-term management contracts: restaurants, leisure activities, conferences. Real estate market crash left marriott with properties for which there were no buyers. Slowly working to sel l properties and reduce debt. Only enough capital expenditure to maintain existing properties. Spin-off a new company for the main lodging and service business. Leave the original company with the property holdings and all the debt. Special stock dividend of one share of the new company per share of the old to stockholders of mc. New company would comprise mc"s lodging, food, and facilities management business. Separate management and bod for the two companies. Ongoing contractual relationship betwe en the companies. Special stock dividend of one share of the new company (mii) per share of the old to stockholders of mc (mc name changes to hmc) The new company will have the right to purchase 20% of the voting shares of the old company.