Court Disclosures of Firms in Chapter 11 Bankruptcy

Ilona Bastiaansen, Alina Lerman, Frank Murphy and Dushyant Vyas

Journal of Accounting Research, 2025, vol. 63, issue 1, 57-112

Abstract: Stakeholders in the Chapter 11 reorganization process face significant information uncertainty about the post‐emergence prospects of the firm. The U.S. Bankruptcy Code requires a debtor to provide a disclosure statement containing “adequate information” about its financial status and a proposed reorganization plan but stops short of rigidly defining the adequacy standard. We document the heterogeneity in disclosure statement information across 16 distinct attributes and examine the variation in disclosures along several dimensions that reflect agency costs and coordination problems. We observe that Chapter 11 disclosure correlates more with claimant‐ and case‐specific characteristics than pre‐bankruptcy debtor characteristics. Our results illustrate the importance of institutional features in specific disclosure settings such as bankruptcy court filings. The research questions and methods of this study were registered via the Journal of Accounting Research’s registration‐based editorial process.

Date: 2025
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https://doi.org/10.1111/1475-679X.12576

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Persistent link: https://EconPapers.repec.org/RePEc:bla:joares:v:63:y:2025:i:1:p:57-112

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Journal of Accounting Research is currently edited by Philip G. Berger, Luzi Hail, Christian Leuz, Haresh Sapra, Douglas J. Skinner, Rodrigo Verdi and Regina Wittenberg Moerman

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