Value Destruction in the New Era of Chapter 11

Vedran Capkun (capkun@hec.fr), Barry E. Adler and Lawrence A. Weiss
Additional contact information
Vedran Capkun: GREGH - Groupement de Recherche et d'Etudes en Gestion à HEC - HEC Paris - Ecole des Hautes Etudes Commerciales - CNRS - Centre National de la Recherche Scientifique

Post-Print from HAL

Abstract: Over the past two decades, control over the US bankruptcy reorganization process has shifted from a debtor's pre-bankruptcy managers to holders of secured claims. The result has been increased adherence to absolute priority and a harder landing for the debtor's managers and shareholders. Because managers still make or can influence the decision whether or when to file a bankruptcy petition, we hypothesize that anticipation of bankruptcy under these new conditions will result in a delay in filing, increased leverage, increased secured debt, and a reduction of asset value for firms at the time they file. We present empirical evidence consistent with our hypotheses.

Keywords: Value Destruction; New Era; Chapter 11 (search for similar items in EconPapers)
Date: 2013-04
References: Add references at CitEc
Citations: View citations in EconPapers (11)

Published in Journal of Law, Economics, and Organization, 2013, 29 (2), pp.461-483. ⟨10.1093/jleo/ewr004⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:hal:journl:hal-00674234

DOI: 10.1093/jleo/ewr004

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD (hal@ccsd.cnrs.fr).