Savior Plan

AAA

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.

RELATED TERMS
  1. Management Buyout - MBO

    A transaction where a company’s management team purchases the ...
  2. Private Company

    A company whose ownership is private. As a result, it does not ...
  3. Management Buy-In - MBI

    A corporate action in which an outside manager or management ...
  4. Management And Employee Buyout ...

    A restructuring initiative that involves both managerial and ...
  5. Employee Buyout - EBO

    A restructuring strategy in which employees buy a majority stake ...
  6. Concurrent Periods

    A period of time in which more than one injury or disability ...
Related Articles
  1. Understanding Leveraged Buyouts
    Fundamental Analysis

    Understanding Leveraged Buyouts

  2. Private Equity A Trendsetter For Stocks
    Mutual Funds & ETFs

    Private Equity A Trendsetter For Stocks

  3. Pinpoint Takeovers First
    Options & Futures

    Pinpoint Takeovers First

  4. How do companies use the Pac-Man defense?
 ...
    Investing

    How do companies use the Pac-Man defense? ...

Hot Definitions
  1. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  2. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  3. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  4. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  5. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  6. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
Trading Center