IDEAS home Printed from https://ideas.repec.org/p/fip/fedcwp/9512.html
   My bibliography  Save this paper

The role of warrants in corporate reorganizations

Author

Listed:
  • Stanley D. Longhofer

Abstract

An argument that informational asymmetries explain why the original shareholders of some firms emerge from Chapter 11 bankruptcy proceedings with stock in the reorganized company, while others receive warrants. 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.

Suggested Citation

  • Stanley D. Longhofer, 1995. "The role of warrants in corporate reorganizations," Working Papers (Old Series) 9512, Federal Reserve Bank of Cleveland.
  • Handle: RePEc:fip:fedcwp:9512
    as

    Download full text from publisher

    File URL: https://fraser.stlouisfed.org/scribd/?item_id=494633&filepath=/docs/historical/frbclev/wp/frbclv_wp1995-12.pdf#scribd-open
    File Function: Full text
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Bankruptcy; options; Stocks;
    All these keywords.

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedcwp:9512. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: 4D Library (email available below). General contact details of provider: https://edirc.repec.org/data/frbclus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.