The Costs of Bankruptcy
AbstractOur paper explores a comprehensive sample of small and large corporate bankruptcies in Arizona and New York from 1995-2001. We find that bankruptcy costs are very heterogeneous and sensitive to measurement method. Still, Chapter 7 liquidations appear no faster or cheaper (in terms of direct expense) than Chapter 11 bankruptcies. But Chapter 11 seems to preserve assets better, and thereby allows creditors to recover relatively more. Our paper also provides a large number of further empirical regularities.
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Bibliographic InfoPaper provided by Yale School of Management in its series Yale School of Management Working Papers with number amz2375.
Date of creation: 07 Dec 2005
Date of revision: 21 Sep 2009
Find related papers by JEL classification:
- G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
- K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
- G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
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