Of bail-outs and bankruptcies

We empirically investigate the determinants of successful debt restructurings fora sample of 116 financially distressed companies in Germany between 1997 and 2004.Of the sampled firms, about half successfully restructure their debt in a workoutwhile the other half fail and file an insolvency petition under the new bankruptcycode. Our evidence suggests that firms more likely to succeed in their restructuringattempt are higher leveraged, owe more debt to banks, and exhibit higher goingconcern values.[...]

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Year of publication:	2006-03-01
Authors:	Jostarndt, Philipp
Institutions:	Universität <München> / Fakultät für Betriebswirtschaft
Subject:	Insolvenz \| insolvency \| Umschuldung \| Kapitakstruktur \| business taxation

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1 Introduction
2 The economics of bankruptcy and debt restructuring
2.1 Key elements of the German bankruptcy code
2.2 Determinants of successful debt restructurings
2.3 Prior empirical evidence
3 Data and hypotheses
3.1 Sampling procedure
3.2 Sample characteristics
3.3 Hypotheses and variables
4 Descriptive statistics and estimation results
4.1 Descriptive statistics
4.2 Prediction of successful debt restructurings
4.3 Evidence from stock returns
5 Summary and conclusions
Appendices<br<Bibliography

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