Debt Recovery in Firm Liquidations: Do Liquidation Trustees Matter?

Jaka Cepec, Peter Grajzl and Katarina Zajc

No 6034, CESifo Working Paper Series from CESifo

Abstract: Insolvency systems play a crucial role in protection of creditor rights, yet micro-level empirical evidence on the functioning of insolvency regimes worldwide is sparse. We investigate whether creditors’ recovery of outstanding claims, a measure of ex-post efficiency of an insolvency regime, depends on the characteristics of the trustee delegated the administration of the liquidation proceedings. To this end, we draw on a novel dataset of firm liquidations from Slovenia and exploit courts’ de facto random assignment of firm liquidation cases to licensed liquidation trustees. Using a wide range of specifications and controls, we find that a subset of trustee characteristics indeed matters for debt recovery. Thus, ex-post efficiency of an insolvency regime depends not only on its formal rules and procedures, but also on who implements them in practice.

Keywords: insolvency; firm liquidations; debt recovery; liquidation trustees; Slovenia (search for similar items in EconPapers)
JEL-codes: G33 K22 P37 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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