Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5107258 | Research in International Business and Finance | 2017 | 30 Pages |
Abstract
Distressed Canadian public firms usually file for bankruptcy protection under either the Bankruptcy and Insolvency Act (BIA) or the more flexible Companies Creditors Arrangement Act (CCAA). The latter targets reorganization while the BIA focuses on both reorganization and liquidation. This paper examines the factors that enter into the choice of either of these two regimes by bankrupt filing public firms. We document that firms are more likely to file under the CCAA when the global stock market is bullish. Larger firms, more leveraged firms and firms with higher quality bankruptcy trustees are more likely to file under CCAA. The worst performing firms also tend to file under the CCAA. Finally firms in Ontario and Quebec have a tendency to file more frequently under the BIA compared to other provinces.
Related Topics
Social Sciences and Humanities
Business, Management and Accounting
Business and International Management
Authors
Mohamed A. Ayadi, Skander Lazrak, Robert Welch,