Suppose Tefco Corp. has a value of

$136136

million if it continues to operate, but has outstanding debt of

$138138

million that is now due. If the firm declares bankruptcy, bankruptcy costs will equal

$2626

million, and the remaining

$110110

million will go to creditors. Instead of declaring bankruptcy, management proposes to exchange the firm's debt for a fraction of its equity in a workout. What is the minimum fraction of the firm's equity that management would need to offer to creditors for the workout to be successful?