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Filtering speed in a Continental European reorganization procedure

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  • Dewaelheyns, Nico
  • Van Hulle, Cynthia

Abstract

Recent studies of US Chapter 11 show it to be a relatively efficient procedure. We examine reorganization cases in a Continental European, creditor-oriented bankruptcy system, viz. Belgium, and report very different findings. Using hazard and cure regression models to determine what drives the length of time spent in reorganizations, we find evidence suggesting that courts have little impact on the screening and filtering process. In fact, many drivers of procedure length prove to have the opposite sign of what one would expect if the procedure would efficiently realise its goals. Instead, the procedure appears to be mainly creditor or owner-driven.

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Bibliographic Info

Article provided by Elsevier in its journal International Review of Law and Economics.

Volume (Year): 29 (2009)
Issue (Month): 4 (December)
Pages: 375-387

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Handle: RePEc:eee:irlaec:v:29:y:2009:i:4:p:375-387

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Web page: http://www.elsevier.com/locate/irle

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Keywords: Reorganization Bankruptcy Hazard models Filtering speed;

References

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Citations

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Cited by:
  1. S. Balcaen & J. Buyze & H. Ooghe, 2009. "Financial distress and firm exit: determinants of involuntary exits, voluntary liquidations and restructuring exits," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium, Ghent University, Faculty of Economics and Business Administration 09/598, Ghent University, Faculty of Economics and Business Administration.
  2. Camacho-Miñano, María-del-Mar & Campa, Domenico, 2014. "Integrity of financial information as a determinant of the outcome of a bankruptcy procedure," International Review of Law and Economics, Elsevier, Elsevier, vol. 37(C), pages 76-85.
  3. Bart Leyman, 2012. "The uneasy case for rehabilitating small firms under the 1997-reorganization law in Belgium: evidence from reorganization plans," European Journal of Law and Economics, Springer, vol. 34(3), pages 533-560, December.
  4. Sofie Balcaen & Sophie Manigart & Jozefien Buyze & Hubert Ooghe, 2012. "Firm exit after distress: differentiating between bankruptcy, voluntary liquidation and M&A," Small Business Economics, Springer, vol. 39(4), pages 949-975, November.
  5. Leyman, Bart & Schoors, Koen J.L. & Coussement, Peter, 2011. "Does court-supervised reorganization work? Evidence from post-confirmation firm failure," International Review of Law and Economics, Elsevier, Elsevier, vol. 31(3), pages 149-168, September.

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