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The CV effect: To what extent does the chance to reorganize depend on a bankruptcy judge’s profile?

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  • Blazy, Régis
  • Esquerré, Stéphane

Abstract

This study explores the link between the individual profiles of French commercial judges and the bankruptcy cases they supervised between 2006 and 2012. A “Curriculum Vitae effect” prevails: the chance to reorganize after filing for bankruptcy varies with the composition of the chambers. We also confirm the existence of a limited (but not marginal) appointment bias, suggesting that bankruptcy cases are not fully randomized across judges. Several variables accounting for the judges’ profiles are found to be significant. The presence of female judges increases the chances of a successful plan (for continuation). We find a similar influence of the judges’ managerial skills and of the highest academic profiles. However, a mismatch between the judges’ profiles (mostly oriented toward big businesses) and bankrupt firms (closer to small and medium-sized enterprises) undermines the probability of reorganizing. We also focus on the two main filters for reorganization: i) the decision to open an observation period, and ii) the court supervision of such a period. Our findings provide normative recommendations to better align lay justice with litigants’ needs. The results from France can be extended to other mixed bankruptcy systems.

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  • Blazy, Régis & Esquerré, Stéphane, 2021. "The CV effect: To what extent does the chance to reorganize depend on a bankruptcy judge’s profile?," International Review of Law and Economics, Elsevier, vol. 66(C).
    • Handle: RePEc:eee:irlaec:v:66:y:2021:i:c:s0144818821000089
    DOI: 10.1016/j.irle.2021.105984
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    Cited by:

    1. Annabi, Amira & Breton, Michèle & François, Pascal, 2021. "Could Chapter 11 redeem itself? Wealth and welfare effects of the redemption option," International Review of Law and Economics, Elsevier, vol. 67(C).
    2. Stef, Nicolae & Ben Jabeur, Sami & Scherer, Robert F., 2022. "Time to resolve insolvency and political elections," International Review of Law and Economics, Elsevier, vol. 72(C).

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    More about this item

    Keywords

    Bankruptcy; Lay justice; Judges; Court; CV; Bankrupt firms; Reorganization; Liquidation;
    All these keywords.

    JEL classification:

    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process

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