Bankruptcy

Working Paper

The Privatization of Bankruptcy: Evidence from Financial Distress in the Shipping Industry

A generally accepted view is that sophisticated bankruptcy procedures are required to mitigate coordination failures and fire sale discounts arising from financial distress. In this paper, we study an industry not subject to mandatory bankruptcy...Read more

Julian Franks
Gunjan Seth
Oren Sussman
Vikrant Vig
01 May 2017

Bail-outs and Bail-ins are better than Bankruptcy: A Comparative Assessment of Public Policy Responses to COVID-19 Distress

COVID-19 has severely disrupted the conduct of business around the globe. In jurisdictions that impose one or more ‘lockdowns’, multiple sectors of the real economy must endure prolonged periods of reduced trading or even total shutdowns. The ...Read more

Kristin van Zwieten
Horst Eidenmüller
Oren Sussman
20 August 2020

When Should Bankruptcy Law Be Creditor- or Debtor-Friendly? Theory and Evidence

We examine how creditor protection affects firms with different levels of owners’ and managers’ personal costs of bankruptcy. Theoretically, we show that firms with high personal costs of bankruptcy borrow and invest more under a more debtor-...Read more

David Schoenherr
Jan Starmans
24 September 2016

Do Market Prices Improve the Accuracy of Court Valuations in Chapter 11?

Past studies document large court valuation errors in Chapter 11 bankruptcy, which are often attributed to the lack of transparent market prices of the debtor’s securities. We document that the introduction of mandated public dissemination of...Read more

Cem Demiroglu
Julian Franks
Ryan Lewis
14 February 2020

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