Marriott Corporation Project Chariot

Marriott Corp's chairman and CEO must decide whether to recommend a restructuring of the company to the board of directors. The proposal he is considering would split the Marriott Corp, a premier hotel developer, owner, and manager, into two separate companies by a stock dividend to shareholders. One of the new companies would contain most of Marriott Corp's profitable management operations, while the other would retain ownership of its hotel properties as well as most of its long-term debt.

1. Why is Marriott's CFO proposing Project Chariot?

2. Is the proposed restructuring consistent with management's responsibility?

3. The case describes two conceptions of managers' fiduciary duty (p. 9). Which do you favor: the shareholder conception or the corporate conception? Does your stance make a difference in this case?

4. Should Mr. Marriott recommend the proposed restructuring to the board?

Marriott Corporation (A)

1. Why is Marriott's chief financial officer proposing Project Chariot? What is your assessment of MC's financial condition? Is this project necessary for the company's survival?.

2. Is Project Chariot consistent with management's responsibilities? To bondholders? To shareholders? To the public?

3. The case describes two conceptions of manager's fiduciary duty. Which do you favor: the shareholder conception or the corporate conception? Does your stance make a difference in this case?

4. Should Mr. Marriott recommend the proposed restructuring to the board?

5. Who will be affected by Project Chariot? Should MC make any concessions to the bondholders?

Marriott Corp's chairman and CEO must decide