We argue that when bankruptcy code is creditor friendly, excessive liquidations cause levered firms to shun innovation …, whereas by promoting continuation upon failure, a debtor-friendly code induces greater innovation. We provide empirical … support for this claim by employing patents as a proxy for innovation. Using time-series changes within a country and cross …

We study how innovative firms manage their innovation portfolios after filing for Chapter 11 reorganization using three … mechanism is secured creditors exercising their control rights on collateralized patents. Creditor-driven patent sales in … likely to be purchased by patent trolls …