This paper examines whether a party to a strategic alliance or joint venture suffers from spillover effects when the other partner files for bankruptcy. We find that the non-bankrupt strategic alliance partners on average experience a negative stock price reaction around their partner firm's...

This Comment reviews recent proposals to address the “empty creditor” problem. The author argues that previous proposals would do little to reduce the risk that empty creditors will block debt-for-equity exchanges in order to collect credit default swap payments. The author presents an...

We examine corporate exit resolutions, including the decisions to merge, to be acquired, and to file for bankruptcy, as a result of long-term deployment of generic competitive strategies among rival firms. We construct a theory that forecasts diverse exit outcomes and demonstrate its predictions...

This paper analyses the duration of the time to exit of distressed firms, differentiating between court driven exits (mainly bankruptcies) and voluntary liquidations. It examines how long firms survive after initial signs of economic distress. The study is conducted on an extensive dataset of...

General Motor's ability to exit bankruptcy through a public offering of its common stock (IPO) depended heavily on the sacrifices of active and retired members of the United Auto Workers (UAW). A review of the now public filings of GM related to the IPO indicate the significant concessions UAW...

The importance of debt-for-equity swaps has come to the fore once again when a lethal combination of a lack of liquidity and a lack of new bank finance and capital injection on a perceived deterioration in covenant strength, associated with the vagaries of the most recent global economic crisis...

The recent report by Standards and poor has generated a lot of controversies. While some commentators are saying such report should be discarded others are clamouring for its proper perusal and examination. Investors are beginning to panic over their investments. The question in the lips of...

We focus on chronically underperforming firms and assess the roles of institutional investors in either facilitating asset redeployment or entrenching managers. We find that, in aggregate, institutions exhibit a flight to quality, selling shares in firms that subsequently fail. For...

Over the period 1980-2007 multinational firms' investment grew four times faster than worldwide GDP. Yet the evidence on whether global diversification is valuable is inconclusive. This paper uses detailed FDI data for 251 UK multinational firms and 4,676 subsidiaries to show that multinational...