Similar Search Results

Absolute priority rule violations, credit rationing, and efficiency

Longhofer, Stanley D. - Federal Reserve Bank of Cleveland - 1997

A demonstration that violations of the absolute priority rule exacerbate credit rationing problems by reducing the payment lenders receive in default states.

Persistent link: https://www.econbiz.de/10005526659

Absolute priority rule violations in bankruptcy

Longhofer, Stanley D.; Carlstrom, Charles T. - In: Economic Review (1995) Q IV, pp. 21-30

specific contracting problem with which a firm and its creditors are faced, and that as a result, an optimal bankruptcy …

Persistent link: https://www.econbiz.de/10005360742

Bankruptcy rules and debt contracting: on the relative efficiency of absolute priority, proportionate priority, and first-come, first-served rules

Longhofer, Stanley D. - Federal Reserve Bank of Cleveland - 1994

An analysis showing that allowing creditors to "run" on a firm in financial distress is socially valuable, since it compensates them for monitoring the firm's condition; in contrast, strict adherence to absolute and proportionate priority rules allows lenders to free ride on the monitoring...

Persistent link: https://www.econbiz.de/10005428231

The role of warrants in corporate reorganizations

Longhofer, Stanley D. - Federal Reserve Bank of Cleveland - 1995

bankruptcy proceedings with stock in the reorganized company, while others receive warrants. By proposing a reorganization plan …

Persistent link: https://www.econbiz.de/10005428266

Protection for whom? creditor conflicts in bankruptcy

Longhofer, Stanley D.; Peters, Stephen R. - Federal Reserve Bank of Cleveland - 2000

Revised. In this article we provide a rationale for bankruptcy law that is based on the conflicts among creditors that … occur when a debtor’s liabilities exceed its assets. In the absence of a bankruptcy law, the private debt … important insight because previous theories supporting a role for bankruptcy law are based on the notion that creditors want to …

Persistent link: https://www.econbiz.de/10005428317

Beneficial "firm runs"

Longhofer, Stanley D. - In: Economic Review (1998) Q I, pp. 21-29

The author argues that runs, which are generally considered undesirable, also have a beneficial effect--improving lenders' monitoring incentives. Lenders' ability to run on the firm helps control its moral hazard problem, while the first-come, first-served aspect of asset distribution keeps...

Persistent link: https://www.econbiz.de/10005491074

A note on absolute priority rule violations, credit rationing, and efficiency

Longhofer, Stanley D. - Federal Reserve Bank of Cleveland - 1995

An argument that APR violations exacerbate credit rationing problems by reducing the payment lenders receive in default states.

Persistent link: https://www.econbiz.de/10005729064