Does uncertainty always harm the creditor’s interest?

Sami Ben Jabeur (), Sabri Boubaker (), Pedro Carmona and Nicolae Stef
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Sami Ben Jabeur: UR CONFLUENCE : Sciences et Humanités (EA 1598) - UCLy - UCLy (Lyon Catholic University), ESDES - ESDES, Lyon Business School - UCLy - UCLy - UCLy (Lyon Catholic University)
Sabri Boubaker: Métis Lab EM Normandie - EM Normandie - École de Management de Normandie = EM Normandie Business School
Pedro Carmona: UV - Universitat de València = University of Valencia = Universidade de Valencia
Nicolae Stef: CEREN - Centre de Recherche sur l'ENtreprise [Dijon] - BSB - Burgundy School of Business (BSB) - Ecole Supérieure de Commerce de Dijon Bourgogne (ESC)

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Abstract: Corporate restructuring involves strategic actions designed to restore a firm's financial stability and long-term viability. However, uncertainty may reduce the effectiveness of such measures, limiting debt repayment. This study aims to investigate the impact of uncertainty on debt recovery rates for creditors in corporate restructuring under US Chapter 11. It employs explainable artificial intelligence (XAI) modelling and fuzzy set qualitative comparative analysis (fsQCA) to identify conditions that lead to high recovery rates for both secured and unsecured creditors. Contrary to conventional wisdom, the findings suggest that uncertainty does not uniformly harm creditors' interests. Secured creditors achieve larger repayments when restructuring occurs during less uncertain periods, while unsecured creditors experience higher recovery rates when the procedure begins in a stable period and the reorganization plan is confirmed during high uncertainty. These results underscore the strategic potential of restructuring procedures and have implications for policymakers and practitioners involved in corporate restructuring.

Keywords: Bankruptcy; Creditors; Recovery rate; Uncertainty; Explainable artificial intelligence (XAI); Fuzzy set qualitative comparative analysis (fsQCA) (search for similar items in EconPapers)
Date: 2026-02-07
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Published in Annals of Operations Research, 2026, ⟨10.1007/s10479-026-07072-6⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05538928

DOI: 10.1007/s10479-026-07072-6

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