Security Pricing and Deviations from the Absolute Priority Rule in Bankruptcy Proceedings

Allan C Eberhart, William T Moore and Rodney L Roenfeldt

Journal of Finance, 1990, vol. 45, issue 5, 1457-69

Abstract: Claims ultimately awarded to shareholders of firms in reorganization were examined for a sample of thirty filings under the 1978 Bankruptcy Reform Act. The authors measured the amount paid to shareholders in excess of that which they would have received under the absolute priority rule and found that this amount represents, on average, 7.6 percent of the total awarded to all claimants. Evidence is also reported that common share values reflect a significant proportion of value ultimately received in violation of absolute priority, suggesting that deviations from the rule were expected by the equity markets. Copyright 1990 by American Finance Association.

Date: 1990
References: Add references at CitEc
Citations: View citations in EconPapers (89)

Downloads: (external link)
http://links.jstor.org/sici?sici=0022-1082%2819901 ... O%3B2-D&origin=repec full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:jfinan:v:45:y:1990:i:5:p:1457-69

Ordering information: This journal article can be ordered from
http://www.afajof.org/membership/join.asp

Access Statistics for this article

More articles in Journal of Finance from American Finance Association Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().