I examine the theoretical prediction that executive inside debt results in higher recoveries in bankruptcy. Using a … unsecured debt in bankruptcy. Firms where CEOs have inside debt at the sample mean experience $0.053 greater recoveries per … dollar of debt in the event of bankruptcy relative to firms where the CEO does not have inside debt. Consistent with theory …

This paper develops a debt-run model to study the effects of liquidity injections on debt markets in the presence of a … terms of debt. We show that when equityholders have a large bargaining power, liquidity injections into distressed firms can … rather cause more aggressive runs from their creditors, hurting the debt value. This outcome occurs because equityholders can …

We analyze a defaultable firm's optimal capital and debt structures when its debt includes senior straight bonds and … either Contingent Convertible or Write-Down bonds. The firm's stakeholders bear a liquidity risk prior to the debt maturity … value hits barriers that are endogenously obtained. The optimal capital structure and the optimal senior/loss-absorbing debt …

The authors discuss the role of private debt in financial crises and attempt to apply the debt deflation logic to the … living off their savings rather than making the required additional savings to reduce their debt and restore balance sheet … positions. With greater forced or needed savings and the resultant contraction of aggregate demand a downward spiral of debt …

Covid-19 crisis are that more than 20% of their public debt is now held by these central banks and that the balance sheet of …

I develop a dynamic capital structure model in which shareholders determine a firm's leverage ratio, debt maturity, and … default strategy. In my model, the firm's debt matures all at once. Therefore, after repaying the principal shareholders own … gives shareholders the incentive to issue finite maturity debt and allows me to study firms' joint choice of leverage and …

A number of studies have examined the effect of public and private ownership on the cost of debt and conclude that the … cost of debt of privately owned firms is higher, driven mainly by the poorer information environment in which these firms … about a higher cost of debt to privately-owned firms, namely the limited access that these firms have to the equity capital …

debt maturity into account. Namely, the firm can switch the diffusion regime of asset value, which involves switching costs … can be unimodal or bimodal with respect to debt maturity depending on the volatility of growth opportunities, and the … induces higher yield spreads for short-term debt; but long-term debt is more affected by increase of expected cash flow, and …

about the design of debt contracts. The results derive from the premise that firms must avoid legal insolvency when issuing … new debt because insolvency at issuance would trigger severe operational limitations on the issuer. I first show that … legal insolvency limits debt capacity, limiting the amount of money that a firm can raise with debt. I next show that legal …