Posted in Finance, Accounting and Economics Terms, Total Reads: 76
Definition: Savior Plan
Savior plan is ultimate and last option for a company to save itself from selling out or bankruptcy. In savior Plan, a company ask its employees and management to invest in the company and hence after adoption of savior plan, the company is said to be employee owned company.
Savior plan is not seen as a good option and it portray a negative image of the company and hence it is considered to be the last Leveraged buyout options. Savior plan can be beneficial for both the sides. If the savior plan is proved to be successful then it is win win situation for both the sides. It is not necessary that only financial distressed companies adopts employee buyout program.
Sometimes financial stable company also adopts Savior plan for its sister companies or its subsidiaries. Employee buyout savior plan is generally called as employee stock ownership plan.