Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
1000346 | Journal of Financial Stability | 2007 | 15 Pages |
Abstract
This paper provides a detailed descriptive analysis of multiple-plan Chapter 11 reorganizations and an empirical study of the determinants of multiple-plan adoption. In the presence of imperfect and asymmetric information multiple plans are a result of extended bargaining that facilitates the convergence of beliefs and resolution of incentives. The longer time in bankruptcy leads to costs that concern all claimants and affect recovery rates and deviations from absolute priority rules. The delay to reach a settlement is mainly due to firm valuation uncertainty, creditor coordination problems, shareholders receiving some consideration in the first plan, and presence of DIP financing.
Keywords
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics, Econometrics and Finance (General)
Authors
Maria Carapeto,