Sovereigns in distress often engage in debt restructuring, typically negotiating with multiple classes of bondholders at once. We use natural experiments to investigate whether sovereign bondholders benefit from committing not to restructure. We find that committing not to restructure one class...

We develop a model of a firm in financial distress. Distress can be mitigated by filing for bankruptcy, which is costly, or preempted by restructuring, which is impeded by a collective action problem. We find that bankruptcy and restructuring are complements, not substitutes: Reducing bankruptcy...

Bernhardt, Koufopoulos, and Trigilia's (2019) note is set as a critique of our paper, Donaldson, Gromb, and Piacentino (2018). However, none of their results or arguments contradicts (or even alters) any of ours