This paper tests whether Chapter 11 restructuring outcomes are affected by time constraints in busy bankruptcy courts. On average, total bankruptcy filings rise by 32% during economic recessions, leaving bankruptcy judges with far less time per case exactly when financial distress is worst. Using the passage of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) in 2005 as an e...

The high social costs associated with bankruptcy have spurred searches for better theoretical understanding and prediction capability. In this paper, we investigate a hybrid approach to bankruptcy prediction, using a genetic programming algorithm to construct a bankruptcy prediction model with variables from a rough sets model derived in prior research. Both studies used data from 291 US public...

Bankruptcy prediction is very important for all the organization since it affects the economy and rise many social problems with high costs. There are large number of techniques have been developed to predict the bankruptcy, which helps the decision makers such as investors and financial analysts. One of the bankruptcy prediction models is the hybrid model using Fuzzy C-means clustering and MAR...

In most cases authors are permitted to post their version of the article (e.g. in Word or Tex form) to their personal website or institutional repository. Authors requiring further information regarding Elsevier's archiving and manuscript policies are encouraged to visit: a b s t r a c t a r t i c l e i n f o We investigate the effects of Chapter 11 bankruptcy filings on product market competit...

In a tree enterprise, users reside at the nodes of the tree and their aim is to connect themselves, directly or indirectly, to the root of the tree. The construction costs of arcs of the tree are given by means of the arc-cost-function associated with the tree. Further the bankruptcy venture is described in terms of the estate of the bankrupt firm and the claims of the various creditors. The fi...

This paper endogenizes the cost of external funds and explores the implications on irreversible investments. The investment strategy incorporates equilibrium feedback that result from a bargaining process between the firm and a lender. Contrary to debt issuance, tax benefits and distress costs cannot be internalized by the firm. “Bad news” are less costly for the firm that has incentives to acc...

Recent theoretical literature has debated the desirability of permitting debtors to contract with lenders over control rights in bankruptcy. Proponents point to the monitoring benefits brought from concentrating control rights in the hands of a single lender. Detractors point to the costs imposed on other creditors by a senior claimant’s inadequate incentives to maximise net recoveries. The UK ...

I develop and estimate a model of cash auction bankruptcy using data on 205 Swedish Þrms. The results challenge arguments that cash auctions, as compared to reorganizations, are immune to conßicts of interest between claimholders but lead to inefficient liquidations. I show that a sale of the assets back to incumbent management is a common bankruptcy outcome. Salebacks are more likely when they...

Abstract This paper analyzes how idiosyncratic risk, measured by the variance of firm-level shocks, affects long-run growth when bankruptcy costs are present. These incurred creditors during procedure failing firms. In an endogenous model with where firms privately observe outcome increase in risk reduces growth. happens because, present, higher enlarges wedge between rental rate capital and it...

A security design model shows that multinational firms needing to finance their operations should issue different securities to investors in different countries in order to aggregate their disparate information about domestic and foreign cash flows. However, if the firm becomes bankrupt, investors may face uncertain costs of reorganizing assets in a foreign country and thus may value foreign as...