Should we redistribute in insolvency
AbstractThe characterisation of a security interest as 'fixed' or 'floating' has generated much litigation in English courts. This is because a floating charge is subordinated by statute to other claims in the debtor's insolvency, whereas a fixed charge is not. This paper uses the example of the floating charge to argue that such statutory redistribution between claimants in corporate insolvency is generally undesirable.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by ESRC Centre for Business Research in its series ESRC Centre for Business Research - Working Papers with number wp319.
Date of creation: Mar 2006
Date of revision:
Contact details of provider:
Web page: http://www.cbr.cam.ac.uk/
corporate insolvency; law and finance; history of floating charge; bankruptcy priorities; secured credit.;
Find related papers by JEL classification:
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
- N43 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Europe: Pre-1913
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-05-27 (All new papers)
- NEP-CFN-2006-05-27 (Corporate Finance)
- NEP-FIN-2006-05-27 (Finance)
- NEP-FMK-2006-05-27 (Financial Markets)
- NEP-LAW-2006-05-27 (Law & Economics)
- NEP-PBE-2006-05-27 (Public Economics)
- NEP-REG-2006-05-27 (Regulation)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Smith, Clifford W, Jr & Warner, Jerold B, 1979. "Bankruptcy, Secured Debt, and Optimal Capital Structure: Comment," Journal of Finance, American Finance Association, vol. 34(1), pages 247-51, March.
- Petersen, Mitchell A & Rajan, Raghuram G, 1997.
"Trade Credit: Theories and Evidence,"
Review of Financial Studies,
Society for Financial Studies, vol. 10(3), pages 661-91.
- Mitchell A. Petersen & Raghuram G. Rajan, 1996. "Trade Credit: Theories and Evidence," NBER Working Papers 5602, National Bureau of Economic Research, Inc.
- Mitchell A. Petersen & Raghuram G. Rajan, . "Trade Credit: Theories and Evidence," CRSP working papers 322, Center for Research in Security Prices, Graduate School of Business, University of Chicago.
- Barclay, Michael J & Smith, Clifford W, Jr, 1995. " The Priority Structure of Corporate Liabilities," Journal of Finance, American Finance Association, vol. 50(3), pages 899-917, July.
- Ivo Welch & Arturo Bris & Alan Schwartz, 2003.
"Who Should Pay for Bankruptcy Costs?,"
Yale School of Management Working Papers
ysm365, Yale School of Management, revised 01 Sep 2004.
- Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
- Mark Carey & Mitch Post & Steven A. Sharpe, 1996.
"Does corporate lending by banks and finance companies differ? Evidence on specialization in private debt contracting,"
Finance and Economics Discussion Series
96-25, Board of Governors of the Federal Reserve System (U.S.).
- Mark Carey & Mitch Post & Steven A. Sharpe, 1998. "Does Corporate Lending by Banks and Finance Companies Differ? Evidence on Specialization in Private Debt Contracting," Journal of Finance, American Finance Association, vol. 53(3), pages 845-878, 06.
- Julian Franks & Colin Mayer & Stefano Rossi, 2003.
"Ownership: Evolution and Regulation,"
OFRC Working Papers Series
2003fe14, Oxford Financial Research Centre.
- Smith, Clifford Jr. & Warner, Jerold B., 1979. "On financial contracting : An analysis of bond covenants," Journal of Financial Economics, Elsevier, vol. 7(2), pages 117-161, June.
- Sris Chatterjee & Upinder S. Dhillon & Gabriel G. Ramirez, 1996. "Resolution of Financial Distress : Debt Restructurings via Chapter 11, Prepackaged Bankruptcies, and Workouts," Financial Management, Financial Management Association, vol. 25(1), Spring.
- Elsas, Ralf & Krahnen, Jan Pieter, 2002. "Collateral, relationship lending and financial distress: An empirical study on financial contracting," CFS Working Paper Series 2002/17, Center for Financial Studies (CFS).
- Triantis, George G, 2000. "Financial Slack Policy and the Laws of Secured Transactions," The Journal of Legal Studies, University of Chicago Press, vol. 29(1), pages 35-69, January.
- Alan Schwartz, . "A Normative Theory of Business Bankruptcy," American Law & Economics Association Annual Meetings 1037, American Law & Economics Association.
- Scott, James H, Jr, 1977. "Bankruptcy, Secured Debt, and Optimal Capital Structure," Journal of Finance, American Finance Association, vol. 32(1), pages 1-19, March.
- Stanley D. Longhofer & João A.C. Santos, 1998.
"The importance of bank seniority for relationship lending,"
9808, Federal Reserve Bank of Cleveland.
- Longhofer, Stanley D. & Santos, Joao A. C., 2000. "The Importance of Bank Seniority for Relationship Lending," Journal of Financial Intermediation, Elsevier, vol. 9(1), pages 57-89, January.
- Stanley D. Longhofer & João A. C. Santos, 1999. "The importance of bank seniority for relationship lending," Proceedings 620, Federal Reserve Bank of Chicago.
- João A. C. Santos & Stanley D. Longhofer, 1998. "The importance of bank seniority for relationship lending," BIS Working Papers 58, Bank for International Settlements.
- Allen N. Berger & Gregory F. Udell, 1988.
"Collateral, loan quality, and bank risk,"
Finance and Economics Discussion Series
51, Board of Governors of the Federal Reserve System (U.S.).
- Triantis, George G, 1992. "Secured Debt under Conditions of Imperfect Information," The Journal of Legal Studies, University of Chicago Press, vol. 21(1), pages 225-58, January.
- Cheol Park, 2000. "Monitoring and Structure of Debt Contracts," Journal of Finance, American Finance Association, vol. 55(5), pages 2157-2195, October.
- Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 71(3), pages 393-410, June.
- Julian Franks & Oren Sussman, 2005. "Financial Distress and Bank Restructuring of Small to Medium Size UK Companies," Review of Finance, Springer, vol. 9(1), pages 65-96, 03.
- Stanley D. Longhofer & Joao A.C. Santos, 2003. "The Paradox of Priority," Financial Management, Financial Management Association, vol. 32(1), Spring.
- Sheng-Syan Chen & Gillian H. H. Yeo & Kim Wai Ho, 1998. "Further Evidence on the Determinants of Secured versus Unsecured Loans," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 25(3&4), pages 371-385.
- Mian, Shehzad L & Smith, Clifford W, Jr, 1992. " Accounts Receivable Management Policy: Theory and Evidence," Journal of Finance, American Finance Association, vol. 47(1), pages 169-200, March.
- John Armour & Douglas Cumming, 2006. "The legislative road to Silicon Valley," Oxford Economic Papers, Oxford University Press, vol. 58(4), pages 596-635, October.
- Fishlow, Albert, 1985. "Lessons from the past: capital markets during the 19th century and the interwar period," International Organization, Cambridge University Press, vol. 39(03), pages 383-439, June.
- Diamond, Douglas W, 1984. "Financial Intermediation and Delegated Monitoring," Review of Economic Studies, Wiley Blackwell, vol. 51(3), pages 393-414, July.
- Fama, Eugene F, 1990. "Contract Costs and Financing Decisions," The Journal of Business, University of Chicago Press, vol. 63(1), pages S71-91, January.
- Diamond, Douglas W., 1993. "Seniority and maturity of debt contracts," Journal of Financial Economics, Elsevier, vol. 33(3), pages 341-368, June.
- John Armour, 2008. "The Law and Economics Debate about Secured Lending: Lessons for European LawMaking?," ESRC Centre for Business Research - Working Papers wp362, ESRC Centre for Business Research.
- John Armour & Audrey Hsu & Adrian Walters, 2006. "The costs and benefits of secured creditor control in bankruptcy: Evidence from the UK," ESRC Centre for Business Research - Working Papers wp332, ESRC Centre for Business Research.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Howard Cobb).
If references are entirely missing, you can add them using this form.