Is Paramount insolvent? What factors are putting Paramount in imminent financial

distress in March $2011($what contractual obligations is the company missing$)?$

What is the nature of the strategic and operational problems faced by Paramount? Is

it a matter of bad strategy, excessive growth, bad financial planning, wrong capital

structure, wrong kind of debt, or simply bad luck?

Evaluate the company's financial policy prior to $2011.$ Is it consistent with the

company's strategic positioning and risk? What errors $($if any$)$ were made: too much

debt, wrong kind of debt?

The company has $$220m$ outstanding convertible bonds with a coupon rate of $6\mathrm{.}5\%.$

Why would a company in distress issue this type of instrument? Isn't this coupon too

high when compared with the cost of the company's other debt? What factors may

have influenced this coupon?

What are the key elements for a strategic and operating restructuring that will be

required to turn the company around and convince the banks to restructure the debt?

Please detail.

Please refer to the summary capital structure on the next page. According to these

market prices $($resulting from the announcement of possible Government loan

guarantees$)$ the enterprise value $($EV$)$ of the firm is approximately $$5\mathrm{.}6$ billion. A

valuation presented by management puts total $EV$ as $$5$ billion. Liquidating the

company is not expected to generate more than $$4$ billion. Please assist management

presenting a financial restructuring of this firm, incorporating a possible sale of

$$500$ million of assets and Government Loan guarantees for an exit financing of $$3\mathrm{.}0$

billion to secure $3$ year loans. What would you do with such cash?, How would losses

be allocated? How would equity be distributed?