Caso Loewen

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REV: MARCH 4, 2002

The Loewen Group, Inc. (Abridged)
In March 1999, John Lacey and the management team at the Loewen Group, Inc., had to decide what course of action to take in light of the company's imminent financial difñculties. On January 22,1999, Lacey, a renowned turnaround specialist, was appointed chairman of Loewen, the

second largest death care company in North America. Headquartered in Burnaby, British Columbia,
Loewen owned over 1,100 funeral homes and more than 400 cemeteries in the U.S. and Canadá; it

also owned 32 funeral homes in the United Kingdom. The company had come a long way since its modest
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The Loewen Group, Inc. (Abridged)

on hand However, this would not be sufficient to meet several large interest and principal payments

Loewen had not yet missed any payments on its debt, and had approximately $30 miliorof-cash

that were due over the coming months. Apayment default would only make negotiations with creditors more difficult, and increase the likelihood of bankruptcy. This possibility would no doubt company's debts.

weigh heavily on the managers' minds as they turned to the important task of the

The Death Care Business

Services; and related producís like cemetery plots, caskets, urns, and gravesite markers Funeral services and cemetery plots can be sold either on an "at-need" basis (i e., at the time of death) or on a "prearranged" or "pre-need" basis. In the latter case, payment for afuneral service or cemetery pío is made in advance, and the proceeds are either held in trust or invested in an insurance policy (that ñames the death care firm as beneficiary).

The primary activities of death care firms include the provisión of funeral, burial, and
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