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into the factors that determined the outcomes of two formal bankruptcy resolution procedures, reorganization, and … liquidation. The evidence shows that the judicial efficiency of debt enforcement had greater effects on the reorganization choice … liquidation over reorganization, and creditors relied on the future value of the viable firm and judicial efficiency to decide …
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Bankruptcy is the legal process whereby financially distressed firms, individuals, and occasionally governments resolve their debts. The bankruptcy process for firms plays a central role in economics, because competition drives inefficient firms out of business, thereby raising the average...
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This paper analyzes the reorganization procedure introduced into the Chinese bankruptcy system in 2007. It shows that … managers devote more effort during the reorganization than before the bankruptcy when the emergence value of the bankrupt firm … necessarily lower than that under the old law. These results call attention to the potential costs of the reorganization procedure. …
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