Showing 1 - 10 of 427
driving asset prices to ‘overshoot’ equilibrium when an asset bubble bursts - threatening widespread insolvency and what …
Persistent link: https://www.econbiz.de/10008528524
We document empirically the determinants of the observed recovery rates on defaulted securities in the United States over the period 1982–1999. The recovery rates are measured using the prices of defaulted securities at the time of default and at the time of emergence from default or from...
Persistent link: https://www.econbiz.de/10005666480
This paper develops a theoretical model in which firms may choose multiple banking relationships to reduce the risk that financing will be denied by ‘relationship banks’ should the latter experience liquidity problems and refuse to roll over lines of credit. The inability to refinance from...
Persistent link: https://www.econbiz.de/10005504283
This paper provides the first large-scale study measuring the bias in favour of going concerns induced by court-administered bankruptcy procedures. Although we find that the large majority of bankrupt firms in our sample of Hungarian firms are kept as going concerns, the evidence suggests that...
Persistent link: https://www.econbiz.de/10005667106
In the recent theoretical literature on lending risk, the common pool problem in multi-bank relationships has been analysed extensively. In this Paper we address this topic empirically, relying on a unique panel dataset that includes detailed credit-fie information on distressed lending...
Persistent link: https://www.econbiz.de/10005504452
Firms that buy distressed and bankrupt companies or some of these companies’ assets earn excess returns that are at least 1.6 percentage points higher than when they make regular acquisitions. These returns come at the expense of the target firm’s shareholders, while overall wealth gains are...
Persistent link: https://www.econbiz.de/10011083439
We analyse bidding incentives of the main creditors (banks) in Swedish bankruptcy auctions. Lacking a direct mechanism for enforcing its seller reservation price, the bank offers financing to a potential bidder in return for a bid strategy that maximizes the expected profits of the bank-bidder...
Persistent link: https://www.econbiz.de/10005656317
We provide comprehensive analysis of the isolation program for financially distressed firms in Romania. The results indicate that the isolation program did not deliver any tangible improvements in operational performance, nor did it enhance the process of privatization or liquidation of large...
Persistent link: https://www.econbiz.de/10005666566
The restructuring of a bankrupt company often entails a change of control. By efficiency of a bankruptcy procedure it is usually meant that the control is allocated into the hands of those who can maximize its value. In this paper we focus instead on how to allocate control with a procedure that...
Persistent link: https://www.econbiz.de/10005791713
We analyse bidding incentives and present evidence on takeover premiums in Sweden’s mandatory bankruptcy auctions. The typical auction attracts multiple bidders and results in the firm being sold as a going concern. We model the incentive of the bankrupt firm’s main creditor (a bank) to...
Persistent link: https://www.econbiz.de/10005792429