IDEAS home Printed from https://ideas.repec.org/a/ris/actuec/v72y1996i4p417-432.html
   My bibliography  Save this article

Impact anticipé de la réforme à la loi sur la faillite

Author

Listed:
  • Martel, Jocelyn

    (THEMA, Université de Cergy-Pontoise)

Abstract

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.

Suggested Citation

  • Martel, Jocelyn, 1996. "Impact anticipé de la réforme à la loi sur la faillite," L'Actualité Economique, Société Canadienne de Science Economique, vol. 72(4), pages 417-432, décembre.
  • Handle: RePEc:ris:actuec:v:72:y:1996:i:4:p:417-432
    as

    Download full text from publisher

    File URL: http://id.erudit.org/iderudit/602215ar
    Download Restriction: no

    References listed on IDEAS

    as
    1. 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.
    2. Jocelyn Martel, 1994. "Commercial Bankruptcy and Financial Reorganization in Canada," CIRANO Papers 94c-02, CIRANO.
    3. 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.
    4. 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.
    5. 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.
    6. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Timothy C. G. Fisher & Jocelyn Martel, 2003. "The Effect of Bankruptcy Reform on the Number of Corporate Reorganization Proposals," Canadian Public Policy, University of Toronto Press, vol. 29(3), pages 339-349, September.
    2. T. C. G. Fisher & J. Martel, 2001. "A Comparison of Business Bankruptcies across Industries in Canada, 1981-2000," THEMA Working Papers 2001-03, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.

    More about this item

    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:ris:actuec:v:72:y:1996:i:4:p:417-432. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bruce Shearer). General contact details of provider: http://edirc.repec.org/data/scseeea.html .

    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.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.