1c. The three independent board members believe that nothing needs to be changed. In fact, the debt levels of CCC are still sound and they mention that there still exist bondholders that need to be repaid (i.e., there exist a certain amount of bonds whose contracts will expire in nine months). Why are they right in being optimistic?

Purchasing and Supply Chain Management
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ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
ChapterC: Cases
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Chicago Cinema Corporation (CCC) suffers severe losses during the pandemic. CCC experiences a loss of 68% in its net income in 2020. CCC is listed at the NYSE and hence its plummeting share prices raise eyebrows at the board of directors: they discuss a series of radical measures in order to turn the tide of CCC. The board of directors has six members (i.e., the CMO, the CFO who serves as the Chairman of the Board, the COO, and three independent members working in the banking industry) and the market capitalization of CCC prior to the onset of the COVID-19 Pandemic is $2.5bn. The board meeting is taking place in September 2020.

1c. The three independent board members believe that nothing needs to be changed. In fact, the debt levels of CCC are still sound and they mention that there still exist bondholders that need to be repaid (i.e., there exist a certain amount of bonds whose contracts will expire in nine months). Why are they right in being optimistic?

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