Credit default swaps (CDSs) can create empty creditors who potentially force borrowers into inefficient bankruptcy but … the effects of empty creditors on firm outcomes depend on the distribution of bargaining power among claimholders. Firms … are more likely to have empty creditors if these would face powerful shareholders in debt renegotiation. The empirical …

effects of bankruptcy announcements on creditors using a unique database. On average, creditors experience severe negative … abnormal equity returns and increases in CDS spreads. In addition, creditors are more likely to suffer from financial distress … later. These effects are stronger for industrial creditors than financials. Simulations calibrated to these results indicate …

debt restructuring process in a sample of U.S. reference entities. Contrary to the predictions of the empty creditors … theory, we do not find evidence that the presence of CDS favors bankruptcy over a private workout. The main determinants of … the probability of filing for bankruptcy in the 2008-2009 crisis are leverage and short-term debt ratios, the proportion …