Some game theory and financial contracting issues in corporate transactions

This article introduces new theories of financial contracting, and analyzes critical economic, and public policy issues either not raised or not analyzed fully in current academic and practitioner literature. A series of transactions by Encompass Services Inc. [M. Nwogugu, Corporate Governance, Legal Reasoning And Credit Risk: The Case of Encompass Services Inc., Managerial Auditing Journal 19(9) (2004)], is used to illustrate certain game theory, financial contracting theory and economic policy issues in the context of corporate transactions and financial distress.