Direct Bankruptcy Costs: Evidence from the Trucking Industry

Daryl M Guffey and William T Moore

The Financial Review, 1991, vol. 26, issue 2, 223-35

Abstract: Direct costs of bankruptcy are measured for a sample of firms in the trucking industry that petitioned for bankruptcy protection from 1970 to 1985. Average direct bankruptcy costs represent 9.12 percent of the book value of total assets as of the year before filing. These costs are large compared with those reported in prior studies: 3.39 percent of book value of assets for retail firms, 4.31 percent for industrial, and 0.53 percent for railroads. The authors also find evidence of substantial economies of scale in bankruptcy costs in the trucking sample. Copyright 1991 by MIT Press.

Date: 1991
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