Conclusion

Frederik Drescher
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Frederik Drescher: TU München

Chapter 7 in Insolvency Timing and Managerial Decision-Making, 2014, pp 147-150 from Springer

Abstract: Abstract This analysis covered the decision on a company's insolvency timing in financial distress in the context of agency problems between the manager and shareholders in Germany. It was shown that an initiation of prepackaged insolvency proceedings is generally in the best interests of shareholders as soon as the legal insolvency trigger of threatening illiquidity is objectively reached. This is due to superior restructuring instruments provided by the legal insolvency framework as compared to free restructuring efforts. The special case of prepackaged proceedings furthermore reduces loss of control as well as problems associated with insolvency costs.

Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-658-02819-0_7

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DOI: 10.1007/978-3-658-02819-0_7

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