Lehman's bankruptcy has triggered calls for new approaches to rescuing systemically important institutions. This essay assesses and confirms the need for a new approach. It identifies the inadequacies of the Bankruptcy Code and advocates an approach modeled on the current regime governing...

This paper takes the spectrum approach to identify possible industrial and enterprise insolvency and goes on to conduct a composite analysis of both the potential industry insolvency spectrum and enterprise insolvency spectrum. Recently, the proportion of industries and enterprises showing signs...

This Essay, which will appear in Across the Great Divide: New Perspectives on the Financial Crisis, a Brookings Institution and Hoover Institution book, begins with a brief overview of concerns raised by the Lehman Brothers bankruptcy about the adequacy of our existing architecture for resolving...

The bankruptcy proceedings of Chrysler and General Motors were filed at the height of the financial crisis that rocked the global economy in the late-2000s. Although both companies originally received federal financial bailouts to try to avert bankruptcy, within months they were forced to file...

The EU's 2019 Insolvency Directive increases debt holders' control over bankruptcy reorganization proceedings, mirroring recent trends in U.S. Chapter 11. Critics, however, claim that too few insolvent firms use similar procedures to avoid liquidation. This view has remained unchallenged, as...

Purpose The ownership structure in Japanese firms has experienced a significant change recently, fueled primarily by regulatory changes. This has important repercussions on corporate performance and risk. This paper examines the impact of insider ownership on the default risk of Japanese firms....

This paper examines the negative externalities that may occur when a large bank fails, describes the nature of those externalities, and explores whether they may be greater in a case involving a large cross-border banking organization. The analysis suggests that the chief negative externalities...

Banks fulfill special functions in an economy. The primary objective of a bank insolvency regime must be to preserve these essential functions. This objective should guide the design of the legal framework for bank insolvency. The banking supervisory authority or a designated resolution...

Changes in collateralization have been implicated in significant default (or near-default) events during the financial crisis, most notably with AIG. We have developed a framework for quantifying this effect based on moving between Merton-type and Black-Cox-type structural default models. Our...