Using a large sample of small-to-medium size firms that defaulted on their bank debt in France, Germany, and the UK, we find that large differences in creditors' rights across countries lead banks to adjust their lending and reorganization practices to mitigate the expected creditor-unfriendly...

We analyze the significance of the debt overhang problem for a large sample of UK firms. We find little evidence that debt overhang affects the firm's ability to raise equity and the likelihood of firm failure. We also examine a large sample of financially distressed firms that succeeded in...