We develop a theoretical model in which firms may choose multiple banking relationships to reduce the risk that financing will be denied by "relationship banks" should the latter experience liquidity problems and refuse to roll over lines of credit. The inability to refinance from relationship...

This paper studies the restructuring of non-marketable debt, when the number of creditors is arbitrary, and there is asymmetric information. With multiple creditors, debt forgiveness has the character of a public good. As for the case of private provision of a public good, mechanism design...

We develop a model in which debt forgiveness can be Pareto- efficient because it improves incentives to invest. A debt restructuring plan, however, must be unanimously approved by a multiplicity of creditors who have private information about the liquidation value of the debtor. Using mechanism...