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Does Resolution Time Really Matter? Evidence From Chapter 11 Firms

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Listed:
  • Ying Kai Yap
  • Jean‐Pierre Fenech
  • Barry Williams

Abstract

This paper investigates how resolution time affects firms under Chapter 11 protection. We find a robust negative association between a firm's resolution time and its probability of emergence, using several controls for endogeneity. The probability of emergence reduces by 0.4% for each month (or 4.8% per year) spent in bankruptcy. Firms filing during recessions have a lower likelihood of emergence. Conditional upon business cycles, the explanatory power of various determinants such as firm size, pre‐packaged or pre‐negotiated bankruptcy, and industry are found to be different. During economic recessions, firm size and pre‐packaged or pre‐negotiated filings have no significant impact on the probability of emergence.

Suggested Citation

  • Ying Kai Yap & Jean‐Pierre Fenech & Barry Williams, 2025. "Does Resolution Time Really Matter? Evidence From Chapter 11 Firms," The Financial Review, Eastern Finance Association, vol. 60(4), pages 1311-1335, November.
    • Handle: RePEc:bla:finrev:v:60:y:2025:i:4:p:1311-1335
    DOI: 10.1111/fire.12448
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    References listed on IDEAS

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