Download or read book Resolution of Financial Distress written by Stijn Claessens and published by World Bank Publications. This book was released on 2001-01-01 with total page 428 pages. Available in PDF, EPUB and Kindle. Book excerpt: The understanding of the economic and legal structure of the institutions of bankruptcy has increased considerably over the past decade. This publication describes the state of current knowledge. Containing both theoretical studies and evidence from recent case studies, it shows the possibilities and methods of legal reform and the pitfalls of misguided political action.
Download or read book Bankruptcy and the Resolution of Financial Distress written by Edith S. Hotchkiss and published by . This book was released on 2012 with total page 89 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper reviews empirical research on the use of private and court-supervised mechanisms for resolving default and reorganizing companies in financial distress. Starting with a simple framework for financial distress and a quick overview of the theoretical research in this area, we proceed to summarize and synthesize the empirical research in the areas of financial distress, asset and debt restructuring, and features of the formal bankruptcy procedures in the US and around the world. Studies of out-of-court restructurings (workouts and exchange offers), corporate governance issues relating to distressed restructurings, and the magnitude of the costs and the efficiency of bankruptcy reorganizations are among the topics covered.
Download or read book Resolution of Corporate Distress written by Stijn Claessens and published by World Bank Publications. This book was released on 1999 with total page 33 pages. Available in PDF, EPUB and Kindle. Book excerpt: Abstract: June 1999 - Evidence from East Asia suggests that a firm's ownership relationship with a family or bank provides insurance against the likelihood of bankruptcy during bad times, possibly at the expense of minority shareholders. Bankruptcy is more likely in countries with strong creditor rights and a good judicial system - perhaps because creditors are more likely to force a firm to file for bankruptcy. The widespread financial crisis in East Asia caused large economic shocks, which varied by degree across the region. That crisis provides a unique opportunity for investigating the factors that determine the use of bankruptcy processes in a number of economies. Claessens, Djankov, and Klapper study the use of bankruptcy in Hong Kong, Indonesia, Japan, the Republic of Korea, Malaysia, the Philippines, Singapore, Taiwan (China), and Thailand. These economies differ in their institutional frameworks for resolving financial distress, partly because of the different origins of their judicial systems. One difference is the strength of creditor rights, which Claessens, Djankov, and Klapper document. They expect that differences in legal enforcement and judicial efficiency should affect the resolution of financial distress. Using a sample of 4,569 publicly traded East Asian firms, they observe a total of 106 bankruptcies in 1997 and 1998. They find that: · The likelihood of filing for bankruptcy is lower for firms with ownership links to banks and families, controlling for firm and country characteristics. Filings are more likely in countries with better judicial systems; Filings are more likely where there are both strong creditor rights and a good judicial system. These results alone do not allow Claessens, Djankov, and Klapper to address whether increased use of bankruptcy is an efficient resolution mechanism. This paper - a product of the Financial Economics Unit, Financial Sector Practice Department - is part of a larger effort in the department to study corporate financing and governance mechanisms in emerging markets.
Download or read book Essays on Bankruptcy and the Resolution of Financial Distress written by Stanley D. Longhofer and published by . This book was released on 1995 with total page 178 pages. Available in PDF, EPUB and Kindle. Book excerpt: That a firm's initial equityholders often emerge from Chapter 11 bankruptcy proceedings with more value than the absolute priority rule (APR) would suggest is now a generally accepted fact. The form in which this value is distributed, however, is less well understood. In particular, why do the original shareholders of some firms emerge from Chapter 11 bankruptcy with stock in the reorganized firm, while others receive warrants? The first essay of this dissertation proposes that informational asymmetries provide the answer to this question. By proposing a reorganization plan in which they receive warrants, the original stockholders of a firm with good future prospects can signal their superior information to the creditors in a way that firms with poor prospects will not wish to mimic. Violations of the APR are commonplace in private workouts, formal business reorganizations, and personal bankruptcies. While some theorists suggest they may arise endogenously, they are clearly magnified by the institutional structure of the bankruptcy code. The second essay shows that APR violations exacerbate credit rationing problems by reducing the payment lenders receive in default states. Furthermore, APR violations make default more likely to occur, raising the interest rate firms must pay when borrowing. Both of these problems arise even when APR violations have no impact on the borrower's incentive to undertake risk-shifting behavior. Typical folklore in corporate finance tells us that existing proportionate priority and absolute priority rules in bankruptcy have evolved in order to eliminate inefficiencies that result when lenders "rush" to retrieve their assets from a firm in financial distress. The final essay of this dissertation shows that when a firm is faced with a moral hazard problem first-come, first-served rules reduce lenders' incentives to free ride on the monitoring efforts of each other. As a result, these rules may reduce the total social cost of loan contracts compared to other bankruptcy rules. These first-come, first-served rules mimic important contractual arrangements found in real world debt contracts.
Download or read book Resolution of Financial Distress written by George Allayannis and published by . This book was released on 1991 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Resolution of Financial Distress written by Sris Chatterjee and published by . This book was released on 1996 with total page 21 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Corporate Financial Distress and Bankruptcy written by Lemma W. Senbet and published by Now Pub. This book was released on 2012-08 with total page 110 pages. Available in PDF, EPUB and Kindle. Book excerpt: Corporate Financial Distress and Bankruptcy has moved into a public domain due to the recent global financial crisis that witnessed failures of many corporations that were rescued by the government. This survey will highlight the resolution mechanisms for corporate financial distress and bankruptcy not only in the private domain but also in the public domain and will use corporate finance paradigms to interpret some of these far-reaching developments in financial distress of systemic nature.
Download or read book Essays in the Resolution of Bankruptcy and Financial Distress written by Gunjan Seth and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Resolution of Corporate Distress written by Stijn Claessens and published by . This book was released on 2004 with total page 33 pages. Available in PDF, EPUB and Kindle. Book excerpt: Evidence from East Asia suggests that a firm's ownership relationship with a family or bank provides insurance against the likelihood of bankruptcy during bad times, possibly at the expense of minority shareholders. Bankruptcy is more likely in countries with strong creditor rights and a good judicial system - perhaps because creditors are more likely to force a firm to file for bankruptcy. The widespread financial crisis in East Asia caused large economic shocks, which varied by degree across the region. That crisis provides a unique opportunity for investigating the factors that determine the use of bankruptcy processes in a number of economies.Claessens, Djankov, and Klapper study the use of bankruptcy in Hong Kong, Indonesia, Japan, the Republic of Korea, Malaysia, the Philippines, Singapore, Taiwan (China), and Thailand. These economies differ in their institutional frameworks for resolving financial distress, partly because of the different origins of their judicial systems. One difference is the strength of creditor rights, which Claessens, Djankov, and Klapper document. They expect that differences in legal enforcement and judicial efficiency should affect the resolution of financial distress.Using a sample of 4,569 publicly traded East Asian firms, they observe a total of 106 bankruptcies in 1997 and 1998. They find that: middot; The likelihood of filing for bankruptcy is lower for firms with ownership links to banks and families, controlling for firm and country characteristics.Filings are more likely in countries with better judicial systems.Filings are more likely where there are both strong creditor rights and a good judicial system.These results alone do not allow Claessens, Djankov, and Klapper to address whether increased use of bankruptcy is an efficient resolution mechanism.This paper - a product of the Financial Economics Unit, Financial Sector Practice Department - is part of a larger effort in the department to study corporate financing and governance mechanisms in emerging markets.
Download or read book Making Failure Feasible written by Thomas H. Jackson and published by Hoover Press. This book was released on 2015-10-01 with total page 267 pages. Available in PDF, EPUB and Kindle. Book excerpt: In 2012, building off work first published in 2010, the Resolution Project proposed that a new Chapter 14 be added to the Bankruptcy Code, exclusively designed to deal with the reorganization or liquidation of the nation's large financial institutions. In Making Failure Feasible, the contributors expand on their proposal to improve the prospect that our largest financial institutions—particularly with prebankruptcy planning—could be successfully reorganized or liquidated pursuant to the rule of law and, in doing so, both make resolution planning pursuant to Title I of Dodd-Frank more fruitful and make reliance on administrative proceedings pursuant to Title II of Dodd-Frank largely unnecessary. This book highlights the problems of dealing with large financial institutions in distress, and Chapter 14's responses to those twin issues. The contributors first outline the basic features of Chapter 14 and point to their continuation as well as additional features to ensure the quick resolution of large financial institutions that would not depend on government discretion and would mesh with emerging ideas about cross-border resolution. The remaining chapters provide the context for reform and show how Chapter 14, as envisioned in this book, would be a substantial advance on administrative-focused resolution procedures.
Download or read book The Resolution of Financial Distress and the Firm s Claims Structure written by Philip O'Connor and published by . This book was released on 1996 with total page 404 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book In Debt Help is on the Way written by Leonard Ullian and published by . This book was released on 1991 with total page 172 pages. Available in PDF, EPUB and Kindle. Book excerpt: IN DEBT? HELP IS ON THE WAY provides valuable information to help stop the financial suffering of millions of Americans. While most financial books deal with how to invest assets, IN DEBT? HELP IS ON THE WAY takes the time to help people with serious financial problems. This easy-to-read, informative & fascinating book covers, among other things, the benefits of personal bankruptcy, the misconceptions, & the affect bankruptcy has on a person's credit. Order from Consumer Financial Solutions, Inc., P.O. Box 355, Neeham, MA 02192-0355, FAX (617) 848-0819, or phone (617) 849-9426.
Download or read book Resolution of Financial Distress Under Chapter 11 written by Amira Annabi and published by . This book was released on 2016 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: We develop a contingent claims model for a firm in financial distress with a formal account for renegotiations under the U.S. bankruptcy procedure (known as Chapter 11). Shareholders and two classes of creditors (senior and junior) alternatively propose a reorganization plan subject to a vote. The bankruptcy judge can intervene in any renegotiation round to impose a plan. The multiple-stage bargaining process is solved in a non-cooperative game-theory setting. The calibrated model yields the liquidation rate, the duration of Chapter 11 and the frequency of deviations from the Absolute Priority Rule, which are consistent with empirical evidence.
Download or read book Norms in Private Bankruptcy written by John Armour and published by . This book was released on 2010 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt: In recent years law and economics scholarship has expanded its frame of reference to incorporate the role of social norms in shaping the incentives of actors. This shift in perspective has yet to filter through to the literature on bankruptcy, which has to date concentrated on the role of legal rules in resolving financial distress. This paper presents qualitative findings on how financial distress is resolved amongst creditors of large UK firms. Such restructurings proceed according to an informal set of market norms known collectively as the quot;London Approach.quot; The paper suggests that regulatory pressure applied by the Bank of England may have been critical in quot;seedingquot; the market norms. It also examines the prospects for the London Approach's future in light of changes in the financial environment brought about by globalisation. The paper points the way towards an incorporation into bankruptcy scholarship of the role played by social norms.
Download or read book The Economics of Bankruptcy Reform written by Philippe Aghion and published by . This book was released on 1992 with total page 78 pages. Available in PDF, EPUB and Kindle. Book excerpt: We propose a new bankruptcy procedure. Initially, a firm's debts are cancelled, and cash and non-cash bids are solicited for the 'new" (all-equity) firm. Former claimants are given shares, or options to buy shares, in the new firm on the basis of absolute priority. Options are exercised once the bids are in. Finally, a shareholder vote is taken to select one of the bids. In essence, our procedure is a variant on the U.S. Chapter 7, in which non-cash bids are possible; this allows for reorganization. We believe our scheme is superior to Chapter 11 since it is simpler, quicker, market-based, avoids conflicts, and places appropriate discipline on management.
Download or read book Bankruptcy Around the World written by Stijn Claessens and published by World Bank Publications. This book was released on 2002 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Strategic Default Investment and the Resolution of Financial Distress written by Nika Koreli and published by . This book was released on 2018 with total page 49 pages. Available in PDF, EPUB and Kindle. Book excerpt: In recent years the U.S. experienced an increase in the share of default events that are resolved out-of-court, as well as a reduction in bankruptcy-related costs. This trend raises the question as to what drives the frequency with which defaults turn into bankruptcies. We propose a theory based on three pillars: first, bankruptcy is costlier than out-of-court restructuring; second, creditors cannot commit to take defaulting borrowers to court; third, firms have private information about the value of their assets, outside investors only learn them only upon bankruptcy. Creditor's bargaining power upon default decreases with bankruptcy costs and it increases with the frequency of strategic default - that is, default by firms which could have honored their obligations. When bankruptcy costs decrease, creditors obtain higher recovery rates out-of-court and therefore firms have lower incentives to default strategically. As a result, bankruptcy can occur less frequently.
