Management has three basic approaches to voluntary restructuring. Carve outs occur when the parent sells a partial interest in a subsidiary through an IPO. The carve out may increase the selling firm’s value due to benefits from restructuring the asset composition of the firm. Again, value is enhanced if the manager focuses more on the remaining assets. Spin-offs occur when the parent transfers complete ownership of a subsidiary to the existing shareholders. The spin-off allows the shareholders to retain control over a given asset base while allowing management to focus on a smaller segment of the firm’s assets. Finally, sell offs involve the direct sale of assets to a third party. The selling firm receives cash, which can be used for debt repayment or reinvestment in the remaining assets. Management in this case cannot only refocus on the main line of core business but also now has the wherewithal to finance any necessary changes. Any of these voluntary approaches may be used by managers of troubled firms in order to fend off the legal complications stemming from bankruptcy. W