Economic theory conjectures complementarities between the ranking of creditors in formal insolvency proceedings and the use of collateral in bank loan contracts as well as the existence of relational compared to arm's length lending. In this paper we seek evidence for these hypotheses taking...

Economic theory conjectures complementarities between the ranking of creditors in formal insolvency proceedings and the use of collateral in bank loan contracts as well as the existence of relational compared to arm’s length lending. In this paper we seek evidence for these hypotheses taking...

Franchising is a business model based on contracts between a franchisor and its franchisees. Like any commercial entity, a franchisor might become insolvent. The interests of franchisees whose franchisor becomes insolvent raises particular issues for insolvency law and policy. The current...

The proliferation of rules aimed at the management of cross-border insolvencies has not been coupled with sufficient attention to the choice of law rules relating to the avoidance of antecedent transactions as legal acts detrimental to all the creditors. This article is the first of its kind in...

Research on the statutory license for certain types of copyright-protected content has revealed an unlikely symbiosis between uncertainty and efficiency. Contrary to received wisdom, which tells us that in order to increase efficiency, we must increase stability, this Article will show that...

Clearinghouses are the centerpiece of global policymakers’ 2009 framework of reforms in the over-the-counter derivative markets in response to the 2007–08 financial crisis. Dodd-Frank’s Title VII implemented these reforms in the U.S. More than ten years have now passed since the...

Following a bankruptcy, how should we distribute the available assets among the eligible creditors? Most people would accept a proportional distribution — for each claimant, calculate her percentage of the sum of all claims and assign her that same percentage of total assets. However, this is...

As regards close-out netting provisions and financial collateral arrangements, one of the main consequences of the recent financial crisis has been the review of the privileged status of these instruments. This paper describes, in general terms, these changes and analyzes the policy underlying...

I investigate how the effectiveness of the judicial system impacts corporate financing policy through the channel of covenant violations across the world. Financial covenant violations trigger creditors to use their contractual acceleration and termination rights to increase interest rates or...

During the past century, three decision-making systems have arisen to accomplish a bankruptcy restructuring—judicial administration, a deal among the firm's dominant players, and a sale of the firm's operations in their entirety. Each is embedded in the Bankruptcy Code today, with all having...