Bankruptcy, Non-Bankruptcy Entitlements, and the Creditors' Bargain

Bankruptcy “Reform” in Congress: Creditors, Committees, Ideology, and Floor Voting in the Legislative Process

Both ideology and interest group interventions are important in voting on bankruptcy legislation. Roughly 15 votes in the House appear to have been changed directly through interest group pressures proxied by campaign contributions. Many more could have been changed if resources could be fully devoted to spot purchases, but most contributions appear to have been aimed at maintaining legislation...

Bankruptcy Judges and Bankruptcy Venue: Some Thoughts on Delaware

The Household Bankruptcy Decision

Personal bankruptcy Ž lings have risen from 0.3 percent of households per year in 1984 to around 1.35 percent in 1998 and 1999, transforming bankruptcy from a rare occurrence to a routine event. Lenders lost about $39 billion in 1998 due to personal bankruptcy Ž lings. But economists have little understanding of why households Ž le for bankruptcy or why Ž lings have increased so rapidly. Until ...

Bankruptcy Codes and Innovation

Bankruptcy Codes and Innovation Do legal institutions governing financial contracts affect the nature of real investments in the economy? We develop a simple model and provide evidence that the answer to this question is yes. We consider a levered firm’s choice of investment between innovative and conservative technologies, on the one hand, and of financing between debt and equity, on the other...

Bankruptcy and Firm Finance

This paper analyzes how an enforcement mechanism that resembles a court affects firm finance. The court is described by two parameters that correspond to enforcement costs and the amount of creditor/debtor protection. We provide a theoretical and quantitative characterization of the effect of these enforcement parameters on the contract loan rate, the default probability and welfare. We analyze...