We test the characteristics of bankruptcy procedures that are likely to generate recoveries for the creditors. We build 132 original legal indexes accounting for the main functions of bankruptcy law that were highlighted by Hart (2000). Namely, we measure the accessibility of the procedure,...

This paper provides evidence on the value creation of bankruptcy procedures that belong to different legal systems (French civil law, German civil law, and British common law). Using a sample of 900 hand-collected corporate bankruptcy files, we find that France and Germany show quite similar...

In this paper, we test the characteristics of bankruptcy procedures that are likely to generate recoveries for the creditors. Such recoveries are related to the performance of bankruptcy law as they stem from the procedures' ability to preserve the value of bankrupt firms, as basis of creditors'...

The reaction of stock prices to bankruptcy filing has been frequently analysed in the financial literature. In this paper we adopt a different approach to that of traditional study, and endeavour to determine whether the reaction of markets is conditioned by the orientation of bankruptcy law....

Courts must audit and then screen out viable but failing firms after their filing for bankruptcy. Yet the judgment and its decision process remain a black box. The bankruptcy literature claims it is an optimal arbitrage between the going concern and the liquidation value. Deviations from the...

This paper provides evidence on the value creation of bankruptcy procedures that belong to different legal systems (French civil law, German civil law, and British common law). Using a sample of 900 hand-collected corporate bankruptcy files, we find that France and Germany show quite similar...

Small businesses may be expected to be more likely to fail because they are more volatile, have less power in negotiations with financial and social partners, are more credit-rationed by credit managers, are less likely to benefit from their experience or 'learning effects', compared to large...

While leveraged buy-outs or "LBO" can create financial and economic value, they may also lead to over-indebtedness for target companies. The financial crisis that followed the burst of the speculative subprime bubble in 2007 revealed and exacerbated the risk of over-indebtedness that affects...