The main motivation of this paper is to study the impact of the composition of creditors on the probability of default …, relational contracts work only when there are creditors who have a repeated relationship with the borrower. We show that …

claimants call options to buy the firm back from senior creditors. Hausch and Ramachandran further develop such a market …-managers to remain in control. Under the ACCORD scheme - Auction-based Creditor Ordering by Reducing Debts - creditors remain … creditors but form a queue, to be serviced in sequence from the firm's operating cash flows. Creditors bid for their position in …