Bargaining tools for the resolution of distressed firms: judicial composition with creditors

Alesssandro Danovi (), Silvia Giacomelli, Patrizia Riva () and Giacomo Rodano
Additional contact information
Alesssandro Danovi: University of Bergamo
Patrizia Riva: University of Piemonte Orientale

No 430, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: The paper provides a large set of new evidence about the workings of judicial composition with creditors (concordato preventivo) procedures based on a new dataset, specifically compiled, which constitutes the richest source of information currently available on the functioning of these procedures. Judicial composition with creditors is mainly used for the piecemeal liquidation of firms (about 70 per cent of the cases). Less than a quarter of judicial compositions with creditors fulfill the provisions of the plans. The recovery rate for secured loans is almost 100 per cent for all types of compositions, while for unsecured loans, recovery rates vary considerably: from 18 per cent in the case of piecemeal liquidation to 37 per cent in the case of restructuring (23 per cent for judicial composition with creditors that provides for the sale of the entire firm or of a branch). Regression analysis shows that better performance of judicial compositions with creditors is associated with a less chronic crisis at the time the judicial composition with creditors is initiated, measured as the time that passes between the earliest persistent difficulties faced by the firm in fulfilling its obligations to bank creditors and the initiation of the procedure.

Keywords: bankruptcy law; firm restructuring; judicial composition with creditors (search for similar items in EconPapers)
JEL-codes: G28 G33 K20 (search for similar items in EconPapers)
Date: 2018-03
New Economics Papers: this item is included in nep-bec and nep-law
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.bancaditalia.it/pubblicazioni/qef/2018-0430/QEF_430_18.pdf (application/pdf)

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:bdi:opques:qef_430_18

Access Statistics for this paper

More papers in Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area Contact information at EDIRC.
Bibliographic data for series maintained by ().