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Park, James - 2015

Assuming benevolent managers, the debt-overhang problem suggests that distressed firms generally refrain from issuing equity. In contrast, agency theory predicts that distressed firm managers have strong self-interests to finance even deteriorating projects through equity issuance. This paper...

Persistent link: https://www.econbiz.de/10013038070

Forecasting Company Financial Distress Based on the Gradient Measurement of Development

Siedlecki, Rafał - 2014

The aim of a warning forecast is to signal “early enough” unfavorable changes in selected business activity areas, described by time series. A warning forecast is, by nature, a long-term forecast; its characteristic feature is the fact that it does not give values of forecasted variables but...

Persistent link: https://www.econbiz.de/10013061428

Estimating the Need for Additional Bankruptcy Judges in Light of the COVID-19 Pandemic

Iverson, Benjamin Charles - 2020

Persistent link: https://www.econbiz.de/10012831545

Development of a financial health indicator based on companies' annual accounts

Vivet, David - 2011

This document describes the development of a financial health indicator based on companies' financial statements. This indicator is conceived as a weighted combination of variables, which is obtained through a model discriminating between failing firms and non-failing firms. The definition of...

Persistent link: https://www.econbiz.de/10011596313

Financial distress as an agency problem : evidence on non-monotonic and substitute discipline effects of leverage and competition

Uğur, Mehmet; Solomon, Edna Maeyen; Zeynalov, Ayaz - 2021

This paper addresses two issues encountered in the empirical financial distress literature: a-theoretical treatment of leverage and product-market competition as predictors of financial distress hazard; and lack of attention to frailty as a potential source of bias in reported estimates. We...

Persistent link: https://www.econbiz.de/10014533532

Bankruptcy Claims Trading

Ellias, Jared A. - 2018

A robust secondary market has emerged over the past twenty years in the debt of Chapter 11 firms. Critics worry that the trading associated with this market has undermined bankruptcy governance, by forcing managers to negotiate with shifting groups of activist investors in the Chapter 11...

Persistent link: https://www.econbiz.de/10012914520

Healthy... Distress... Default

Kakushadze, Zura - 2019

We discuss a simple, exactly solvable model of stochastic stock dynamics that incorporates regime switching between healthy and distressed regimes. Using this model, which is analytically tractable, we discuss a way of extracting expected returns for stocks from realized CDS spreads,...

Persistent link: https://www.econbiz.de/10012863946

The Relationship Between Bankruptcy Risk and Growth for Non-Listed Firms

Nordal, Kjell Bjørn; Næs, Randi - 2011

We investigate the relationship between bankruptcy risk and expected future sales growth for Norwegian non-listed firms for the period 1988-2007. We find that firms with high bankruptcy risk also have high expected future growth. Financial ratios characterizing firms with high bankruptcy risk...

Persistent link: https://www.econbiz.de/10014185729

Debtor-in-Possession Financing, Loan-to-Loan, and Loan-to-Own

Li, Kai; Wang, Wei - 2016

This paper provides new evidence on the roles and strategies adopted by different types of debtor-in-possession (DIP) lenders: “loan-to-loan” (LTL) lenders — prepetition secured bank lenders providing DIP financing, and “loan-to-own” (LTO) lenders — activist investors (i.e., hedge...

Persistent link: https://www.econbiz.de/10014157129

Impact of supplier’s right to initiate customer’s insolvency on trade credit

Agarwal, Shivangi; Singhvi, Bhavya - 2022

if suppliers attain the right to initiate insolvency under bankruptcy laws. However, suppliers’ incentives to safeguard … their customer base can deter them from initiating insolvency proceedings, making these rights a hollow threat. In this … paper, we investigate the impact of insolvency rights to suppliers under bankruptcy laws on their trade credit behavior …

Persistent link: https://www.econbiz.de/10013309010