Creditor Coordination, Liquidation Timing, and Debt Valuation
Journal of Financial and Quantitative Analysis, 2011, vol. 46, issue 05, pages 1407-1436
This paper derives closed-form solutions for values of debt and equity in a continuous-time structural model in which the demands of creditors to be repaid cause a firm to be put into bankruptcy. This allows discussion of the effect of creditor coordination in recovering money on the values of debt, equity, and the firm, as well as on optimal capital structure. The effects of features of bankruptcy codes that prevent coordination failures between creditors, such as automatic stays and preference law, are also considered. The model suggests that such features, while preventing coordination failures, can decrease welfare.
References: Add references at CitEc
Citations View citations in EconPapers (2) Track citations by RSS feed
Downloads: (external link)
http://journals.cambridge.org/abstract_S0022109011000330 link to article abstract page (text/html)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: http://EconPapers.repec.org/RePEc:cup:jfinqa:v:46:y:2011:i:05:p:1407-1436_00
Access Statistics for this article
Journal of Financial and Quantitative Analysis is currently edited by November
More articles in Journal of Financial and Quantitative Analysis from Cambridge University Press Cambridge University Press, UPH, Shaftesbury Road, Cambridge CB2 8BS UK.
Series data maintained by Keith Waters ().