Question

Search the Internet or Strayer databases for a publicly traded company that recently filed for bankruptcy protection. Review the most recent financial information for the company and be prepared to discuss. "Financial Risk" Please respond to the following: • Based on the company you researched in the e-Activity, assess the financial “red flags” that would have indicated that the company may be having financial difficulty providing suggestions related to how management should address these problems. Provide support for your rationale. • Evaluate whether or not you are confident that the models used for predicting bankruptcy would have been adequate to predict the invariable bankruptcy of the company you researched. Provide evidence supporting your position

Answer 1

        TripCo is currently a wholly owned subsidiary of Liberty. Immediately following the Spin-Off, our principal businesses, assets and liabilities will consist of Liberty's 22% ownership interest and 57% voting interest in TripAdvisor, Liberty's 100% ownership interest in BuySeasons, anticipated corporate level cash and cash equivalents of $50 million and $400 million in indebtedness. Following the Spin-Off, we will be an independent publicly traded company and Liberty will not retain any ownership interest in us. In connection with the Spin-Off, we expect to enter into certain agreements, including the reorganization agreement and the tax sharing agreement, with Liberty and/or Liberty Media Corporation ( Liberty Media ) (or certain of their subsidiaries), pursuant to which, among other things, we and Liberty will indemnify each other against certain liabilities that may arise from our respective businesses. See "Certain Relationships and Related Party Transactions—Relationships Between TripCo and Liberty and/or Liberty Media."

        TripAdvisor is an online travel company that empowers users to plan and maximize their travel experience. Its travel research platform aggregates reviews and opinions from its community of travelers about destinations, accommodations (including hotels, resorts, motels, bed and breakfasts or B&Bs, specialty lodging and vacation rentals), restaurants and activities throughout the world through its flagship TripAdvisor brand. TripAdvisor's branded websites include tripadvisor.com in the United States and localized versions of the website in 33 other countries, including in China under the brand daodao.com . Its branded websites globally have received more than 260 million monthly unique visitors during the year ended December 31, 2013, according to Google Analytics, and it features over 125 million reviews and opinions. Beyond travel-related content, TripAdvisor's websites also include links to the websites of its customers, including travel advertisers, allowing travelers to directly book their travel arrangements. In addition to the flagship TripAdvisor brand, TripAdvisor also manages and operates 20 other travel media brands, connected by the common goal of providing comprehensive travel planning resources across the travel sector. TripAdvisor derives substantially all of its revenue from the sale of advertising, primarily through click-based advertising and, to a lesser extent, display-based advertising. The remainder of its revenue is generated through a combination of subscription-based offerings, making hotel room nights available on its transactional sites, including Jetsetter and Tingo, and other revenue including content licensing.

        Following the Spin-Off, BuySeasons will be a wholly owned subsidiary of ours. BuySeasons owns and operatesBuyCostumes.com and the Celebrate Express family of websites. BuySeasons, an internet celebrations leader, provides a unique party offering by giving individuals the resources necessary to plan, execute and attend a wide variety of celebrations and costuming events. These resources include party supplies primarily through the retail websites which offer proprietary products through exclusive license agreements and costumes for a wide variety of occasions (the primary occasion is Halloween). BuySeasons purchases its products from various suppliers, both domestic and international. BuySeasons believes it has a competitive advantage due to the combination of a large assortment of online products, product personalization, value pricing and a high level of customer service. BuySeasons is highly seasonal with approximately half of its revenue earned from the sale of costumes in September and October leading up to Halloween. BuySeasons maintains a customer service center, at its corporate headquarters, and customer service representatives are available 16 hours a day, seven days a week during its busy season to respond to customer questions.

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        When we refer to "our business" in this prospectus, we are referring to the businesses of TripAdvisor, BuySeasons and their respective subsidiaries and affiliates following the Spin-Off.

        Our principal executive offices are located at 12300 Liberty Blvd., Englewood, Colorado 80112. Our main telephone number is (720) 875-5200.

Liberty's Current Corporate Structure

        The Liberty Interactive common stock and Liberty Ventures common stock are intended to track and reflect the economic performance of the Interactive Group and the Ventures Group, respectively. Tracking stock is a type of common stock that the issuing company intends to reflect or "track" the economic performance of a particular business or "group," rather than the economic performance of the company as a whole. While the Interactive Group and the Ventures Group have separate collections of businesses, assets and liabilities attributed to them, no group is a separate legal entity and therefore no group can own assets, issue securities or enter into legally binding agreements. Holders of tracking stocks have no direct claim to the group's assets and are not represented by separate boards of directors. Instead, holders of tracking stock are stockholders of the parent corporation, with a single board of directors and subject to all of the risks and liabilities of the parent corporation. The Interactive Group is primarily focused on Liberty's video and e-commerce operating businesses and has attributed to it Liberty's operating subsidiaries QVC, Inc., Provide Commerce, Inc., Backcountry.com, Inc., Bodybuilding.com, Inc., Celebrate and CommerceHub, as well as Liberty's interest in HSN, Inc., along with cash and certain liabilities that reside with QVC and the other attributed entities as well as outstanding senior notes and one series of exchangeable debentures of Liberty Interactive LLC ( Liberty LLC ) and certain deferred tax liabilities. The Ventures Group is comprised primarily of Liberty's investments in TripAdvisor, Expedia, Inc., Interval Leisure Group, Inc., Tree.com, Inc., Time Warner Inc., Time Warner Cable Inc. and AOL, Inc., along with cash and certain liabilities related to Liberty LLC's other exchangeable debentures and certain deferred tax liabilities.

        At present, Liberty's interest in TripAdvisor is attributed to its Ventures Group and BuySeasons, as a part of Celebrate, is attributed to its Interactive Group. Concurrently with Liberty's plan to effect the Spin-Off, Liberty is also pursuing the Proposed Reclassification, whereby it would reclassify its Liberty Interactive common stock into a new QVC Group common stock and a new Liberty Digital Commerce common stock.

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