Marriott Case - Finance 6000.

Marriott Corporation (A)

Introduction.

In 1927 J.W. Marriott Sr. founded the Marriott Corporation (MC) and during the 1980s experienced a huge growth. Marriotts main strategy in those days was create hotel properties around the world and selling these properties to outside investors while retaining profitable long-term management contracts. MC was a ultraconservative fellowship and it stressed the themes of careful attention on the details, the organization and its employees. caliber was the one of the highest priority set by the founder himself. In 1953 MC went public, selling one-third of its shares in its Initial humankind Offering. Although they continued to sell public stock, the Marriott family always kept a 25% ownership over the business. J.W. Marriott Sr. resigned then in 1964, after having opened its first hotel in Washington eighter years earlier. J.W. Marriott Jr., his son, took over from then and immediately abandoned his fathers conservative financial policies.

In the 70s MC began to use bank credit and unfastened debt instead of mortgages to the finance development. In addition, MC had experienced two financial crises, which were due to dry up of limited partnerships in 1989, where MC experienced a sharp release in income and the 1990 real estate market crash. This resulted in MCs stock impairment to fall by more than two-thirds, which means a drop of $2 billion in market capitalization.



This was the first judgment of conviction investor-owned Marriott hotels went bankrupt.

Issues.

This case deals with debt and its relevant actions to minimize debt and make the company financially healthy again, where analysis must be done to situate the potential financing opportunity and restructuring the corporation.

Due to the aforementioned economic downturn in the early 90s and the Tax Reform Act of 1986, MC had limited ability to raise funds. This resulted in large pastime payments...

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