In this paper we model the spillovers from the restructuring of a financially distressed firm on other firms and the feedback effects from the restructuring. Our results indicate that the spillover and feedback effects are complex and are determined by several factors including the level of...

We model restructuring when hedge funds with expertise in navigating distress intervene. Whether hedge funds help distressed firms or act like vultures are two sides of the same coin. Interventions help when firm prospects are bright and assets are not easily redeploy-able. Interventions are...