Gennaioli, Nicola; Rossi, Stefano - In: Review of Financial Studies 23 (2010) 11, pp. 4078-4114
We study a demand-and-supply model of judicial discretion in corporate bankruptcy. On the supply side, we assume that bankruptcy courts may be biased for debtors or creditors, and subject to career concerns. On the demand side, we assume that debtors (and creditors) can engage in forum shopping...