In 2009, the Seventh Circuit ruled in U.S. v. Apex Oil that certain types of injunctions requiring firms to clean up previously released toxic chemicals were not dischargeable in bankruptcy. This was widely perceived to represent a split with Sixth Circuit precedent, although Supreme Court cert...

How do firms' efforts to prevent harm to third parties change as they approach, enter, and then exit bankruptcy? To help answer this, I investigate a panel of roughly 350 US firms, all of which declare bankruptcy and are regulated under the Clean Water Act (CWA) for pollutants they release into...

The paper analyses options in case of insolvency. Although insolvency plans empirically are very successful, they are not used very much. Reasons that prevent their application and possibilities for their promotion are discussed.

The paper analyses options in case of insolvency. Although insolvency plans empirically are very successful, they are not used very much. Reasons that prevent their application and possibilities for their promotion are discussed. -- Insolvenz ; Insolvenzplan ; Insolvenzverwalter ;...

Two recent papers examine the impact of corporate bankruptcy laws on new business start-ups in 29 countries over 1990 - 2008 (Peng et al., 2010; Lee et al., 2010). In this commentary, I briefly point out two significant issues which future researchers might want to consider. First, several countries...

This study compares the valuations of debtors emerging from Chapter 11 with the valuations of similar publicly traded firms. For each debtor in my sample, I collect valuation experts' enterprise and equity valuations that are judicially confirmed and based on managements' published financial...

By treating derivatives and financial repurchase agreements much more favorably than it treats other financial vehicles, American bankruptcy law subsidizes these arrangements relative to other financing channels. By subsidizing them, the rules weaken market discipline during ordinary financial...

In a typical "phoenix syndrome" scenario, a small business entrepreneur who controls the financially distressed Company A registers Company B, to which the assets of Company A are transferred in what appears to be fraudulent conveyance. Company B serves as a vehicle through which the business is...

The U.S. Chapter 7 bankruptcy system relies on private trustees to administer liquidations. By law, creditors pay trustees a substantial commission on asset sales. I exploit kinks in the commission function to estimate a structural model of moral hazard by trustees. While reducing commissions...