Prior research finds that commercial borrowers provide lenders with private information. This research generally does not identify how lenders obtain such information or the types of information obtained, however, limiting the directness and interpretability of tests of lenders' use of the...

We hypothesize and provide evidence that accounting conservatism and complementary accounting-based debt covenants increase expected recovery rates by preserving the firm's fungible economic assets at levels sufficient to support recovery by debtholders. We employ Das & Hanouna's (2009) approach...