Savior Plan

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DEFINITION of 'Savior Plan'

When management and employees borrow money to invest in their failing company in an attempt to save it. Essentially, a savior plan precedes a management and employee buyout.

INVESTOPEDIA EXPLAINS 'Savior Plan'

After a savior plan is put into place, one could say that the company is "employee-owned".
This type of plan can fail because of high borrowing costs, which may not be paid back quickly enough to obtain a return on the investment. Also, savior plans do not guarantee that the company will begin to operate efficienctly after the buyout.

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