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Impact anticipé de la réforme à la loi sur la faillite

Listed author(s):
  • Martel, Jocelyn

    (THEMA, Université de Cergy-Pontoise)

The main objective of the new Bankruptcy Act is to promote the use of financial reorganization. Data from a sample of 393 financial reorganizations in Canada are used to determine whether or not this represents an improvement over the previous System and whether or not the objective to increase the proportion of reorganizations will be met. Results from the statistical and logit analyses suggest that (i) the new voting requirement should increase the number of accepted proposals by 1.5 percentage points, (ii) the change in Crown priority should raise the success and acceptance rate by 2.02 and 0.55 percentage points respectively and (iii) the changes relating to stay of proceedings are expected to raise the use of holding proposals and thus reduce the likelihood of acceptance of a proposal by unsecured creditors. Finally, in its efforts to promote reorganization, the new bankruptcy regime is expected to attract firms in the tail of the distribution of financially distressed firms. This will worsen the screening properties of the bankruptcy system and make it more costly for the Canadian economy. L’objectif principal de la réforme à la Loi sur la faillite réside dans l’utlisation accrue de la procédure de réorganisation financière au détriment de la procédure de faillite. La présente étude a pour but d’évaluer l’impact potentiel de cette réforme sur la base d’une banque de données originale comprenant 393 entreprises canadiennes en réorganisation financière. Les résultats de l’analyse empirique nous mènent aux conclusions suivantes : (i) l’assouplissement de la règle de vote devrait entraîner une augmentation du nombre de propositions acceptées de l’ordre de 1.5 points de pourcentage, (ii) la modification de la priorité accordée à une partie des créances gouvernementales devrait accroître le taux de succès et d’acceptation des propositions de l’ordre de 2.02 et 0.55 points de pourcentage respectivement, et (iii) les modifications apportées au gel des procédures pourraient entraîner une augmentation de l’utilisation de propositions provisoires ce qui résulterait dans une diminution de la probabilité d’acceptation par les créanciers non garantis. Finalement, la récente réforme à la Loi sur la faillite possède tout le potentiel d’attirer en réorganisation des entreprises dans la partie gauche de la queue de la distribution des entreprises en difficultés financières. Ceci devrait réduire l’efficacité du système de faillite canadien et imposer des coûts additionnels à notre économie.

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Article provided by Société Canadienne de Science Economique in its journal L'Actualité économique.

Volume (Year): 72 (1996)
Issue (Month): 4 (décembre)
Pages: 417-432

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Handle: RePEc:ris:actuec:v:72:y:1996:i:4:p:417-432
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  1. Philippe Aghion & Patrick Bolton, 1992. "An Incomplete Contracts Approach to Financial Contracting," Review of Economic Studies, Oxford University Press, vol. 59(3), pages 473-494.
  2. Jocelyn Martel, 1991. "Bankruptcy Law and the Canadian Experience: An Economic Appraisal," Canadian Public Policy, University of Toronto Press, vol. 17(1), pages 52-63, March.
  3. Fisher, Timothy C G & Martel, Jocelyn, 1995. "The Creditors' Financial Reorganization Decision: New Evidence from Canadian Data," Journal of Law, Economics, and Organization, Oxford University Press, vol. 11(1), pages 112-126, April.
  4. Jocelyn Martel, 1994. "Commercial Bankruptcy and Financial Reorganization in Canada," CIRANO Papers 94c-02, CIRANO.
  5. Gunderson, Morley & Kervin, John & Reid, Frank, 1986. "Logit Estimates of Strike Incidence from Canadian Contract Data," Journal of Labor Economics, University of Chicago Press, vol. 4(2), pages 257-276, April.
  6. Timothy C. G. Fisher & Jocelyn Martel, 1994. "Will the Bankruptcy Reform Work? An Empirical Analysis of Financial Reorganization in Canada," Canadian Public Policy, University of Toronto Press, vol. 20(3), pages 265-277, September.
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