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Does the Absolute Priority Rule Still Apply to Individual Chapter 11 Debtors Post-BAPCPA

Mendenhall, Anthony - 2013

Section 1129(b)(1) of the Bankruptcy Code codifies a principle known as the 'absolute priority rule.' The absolute priority rule requires that creditors be provided for in full before holders of equity can receive or retain any property under a plan of reorganization. The absolute priority rule...

Persistent link: https://www.econbiz.de/10013090894

Debtor Protection and Business Dynamism

Cerqueiro, Geraldo - 2019

We study the effect of debtor protection on business dynamism. We find that greater debtor protection, in the form of more lenient personal bankruptcy laws, increases firm entry only in sectors requiring low startup capital. We also find that debtor protection increases firm exit and job...

Persistent link: https://www.econbiz.de/10012898798

The Ownership and Trading of Debt Claims in Chapter 11 Restructurings

Ivashina, Victoria - 2017

Using a novel data set that covers individual debt claims against 136 bankrupt US companies and includes information on a subset of claims transfers, we provide new empirical insight regarding how a firm's debt ownership relates to bankruptcy outcomes. Firms with higher debt concentration at the...

Persistent link: https://www.econbiz.de/10012976638

Inside Debt and Recoveries in Bankruptcy

Pawliczek, Andrea - 2016

dollar of debt in the event of bankruptcy relative to firms where the CEO does not have inside debt. Consistent with theory …

Persistent link: https://www.econbiz.de/10012995133

Debt Dynamics and Default Probabilities

Hackbarth, Dirk - 2020

We derive a simple integral equation for the default probability over a finite time horizon of a company that makes coupon payments on its debt and infrequently returns to its leverage target by increasing its debt unless it defaults on its debt. Compared to the conventional (constant default...

Persistent link: https://www.econbiz.de/10012846065

Debt and Insolvency

Heaton, J.B. - 2020

about the design of debt contracts. The results derive from the premise that firms must avoid legal insolvency when issuing … new debt because insolvency at issuance would trigger severe operational limitations on the issuer. I first show that … legal insolvency limits debt capacity, limiting the amount of money that a firm can raise with debt. I next show that legal …

Persistent link: https://www.econbiz.de/10012852105

Law and Courts in an Age of Debt

Ellias, Jared A.; de Fontenay/, Elisabeth - 2023

Judges perform very different analyses when investors ask for protection. When the petitioning party is a shareholder, the court will deploy broad equitable doctrines with an eye towards reaching a fair result. On the other hand, creditors typically find a much less sympathetic ear, as courts...

Persistent link: https://www.econbiz.de/10014265091

CACs and Doorknobs

Gelpern, Anna - 2019

In response to debt crises, policy makers often feature Collective Action Clauses (CACs) in sovereign bonds among the pillars of international financial architecture. However, the content of official pronouncements about CACs suggests that CACs are more like doorknobs: a process tool with...

Persistent link: https://www.econbiz.de/10012860618

Credit Derivatives, Creditor’s Powers and Bankruptcy Initiation

Radulovic, Branko - 2010

While credit risk transfer market dramatically increases the complexity of lender's incentive structure and above all reduces the incentives of the bank to monitor debtor, a ‘harsh' bankruptcy environment (as evidenced in the shift from the debtor controlled to creditor controlled...

Persistent link: https://www.econbiz.de/10013139530

Conceptualizing the Failure of Financial Institutions and the Role of Risk Management in Averting Failure : The CLS Model

Bezis, Justin N. - 2013

The failure of financial institutions is often depicted as an externally-driven event in which certain triggers almost inevitably lead to the collapse of the firm. In contrast, this paper views institutional failure as a multistage process in which precautionary measures taken by the firm can...

Persistent link: https://www.econbiz.de/10013089043

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