This paper reviews empirical research on the use of private and court-supervised mechanisms for resolving default and reorganizing companies in financial distress. Starting with a simple framework for financial distress and a quick overview of the theoretical research in this area, we proceed to...

A number of proposals for reforming Chapter 11 suggest that a mandatory cash auction of the bankrupt firm would lead to more efficient investment outcomes than a reorganization based system. However, recent empirical work describing reorganizations in European countries which mandate the sale of...

This paper provides empirical evidence that takeovers can facilitate the efficient redeployment of assets of bankrupt firms. We investigate two questions central to the debate over acquisitions of bankrupt companies based on a sample of 55 firms acquired in Chapter 11. First, we examine whether...

This paper investigates the role of external agents, known as vulture investors, in the governance and reorganization of a sample of 288 firms which default on their public debt. Vultures are frequently active on boards and in the management of target companies, and gain control of 16% of the...

This paper provides empirical evidence that takeovers can facilitate the efficient redeployment of assets of bankrupt firms. We investigate two questions central to the debate over acquisitions of bankrupt companies based on a sample of 55 firms acquired in Chapter 11. First, we examine whether...