Cram-Down Deal

Cram-Down Deal - A cram-down deal is colloquial term for when a situation occurs when shareholders are forced into a position where they must accept undesirable merger or buy out terms. These undesirable conditions could include accepting junk bonds as opposed to equity or cash, although this is usually due to the company that they have shares in finding themselves in financial trouble and needing someone to merge with them, in order for the company to survive. When they cannot find someone to merge with them, a buy out comes into play and the company generally folds.