This timely book surveys seminal contributions to the economics of bankruptcy. It offers a comprehensive compilation of work by both legal scholars and economists working in the fields of corporate and consumer finance. An original introduction, written by the editor, provides a commentary on...

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...