The Costs of Bankruptcy

Arturo Bris, Ivo Welch and Ning Zhu

Yale School of Management Working Papers from Yale School of Management

Abstract: Our paper explores a comprehensive sample of small and large corporate bankruptcies in Arizona and New York from 1995-2001. We find that bankruptcy costs are very heterogeneous and sensitive to measurement method. Still, Chapter 7 liquidations appear no faster or cheaper (in terms of direct expense) than Chapter 11 bankruptcies. But Chapter 11 seems to preserve assets better, and thereby allows creditors to recover relatively more. Our paper also provides a large number of further empirical regularities.

JEL-codes: G28 G33 K22 (search for similar items in EconPapers)
Date: 2005-12-07, Revised 2009-09-21
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Persistent link: https://EconPapers.repec.org/RePEc:ysm:wpaper:amz2375

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