We analyze the impact of pre-bankruptcy dynamics on the levels of unsecured debt at the start of bankruptcy procedures, using a unique sample of small distressed firms that reorganize under Belgian court-supervision. These firms rely on trade credit if banks withdraw their lending prior to...

Using a sample of small Belgian firms that reorganized under the 1997 Law on Judicial Composition, I empirically review the law’s effectiveness to rehabilitate distressed debtors. The econometric findings show that firms with less pre-bankruptcy operational losses and a better cash position...

Unlike the US Chapter 11, the Belgian reorganization legislation requires that distressed firms remain temporarily under court-supervision during the post-confirmation stage. Using a hand-collected sample of firms, we analyze the likelihood of business failure and the time to failure during this...