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November 1999 - Financial reorganization under bankruptcy reduces a firm's debts to serviceable levels through …-managers to remain in control. Under the ACCORD scheme - Auction-based Creditor Ordering by Reducing Debts - creditors remain … ACCORD would be appropriate for East Asia, where, despite new bankruptcy laws, inexperienced courts are unlikely to nudge …
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When borrowers are delinquent, senior debtholders prefer liquidation whereas junior debtholders prefer to maintain their option value by delaying resolution or modifying the loan. In the mortgage market, a conflict of interest (“holdup”) arises when servicers of securitized senior liens are...
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