I examine how financially distressed firms choose among three alternatives: traditional Chapter 11 bankruptcy, prepackaged bankruptcy, and out-of-court restructuring. In doing so, I investigate firm performance and capital structure, as well as the previously undocumented role of managerial...

This study investigates empirically the factors that determine whether firms borrow from banks and other finance companies versus issuing bonds for sale to the public. I analyze 1,560 new borrowings from banks, non-bank private lenders, and the public debt market by 1,480 U.S. public firms over...

This dissertation is comprised of two essays in which I investigate the idea that cross-subsidization of poorly-performing units within conglomerates is a cause for the value loss from diversification. In the first essay, I document a significant curvilinear relation between the value of...

The purpose of this study is to establish empirical proxies for the economic viability of firms in financial distress and to ascertain their role in reorganization policy. The data suggest that firms with stronger pre-bankruptcy operating performance, higher pre-bankruptcy leverage, and higher...

Using a sample of 249 firms that went public over 1975-1984, I provide evidence on how and why ownership and board structures evolve over the subsequent 16 years. I find that changes in ownership and board structures are related to lifecycle changes that alter the relative cost/benefit of...

The first essay tests alternative theories about the effect of asset liquidity on capital structure and debt capacity. Using data from a broad sample of U.S. public companies, I find that leverage is positively related to asset liquidity. The relation is stronger following negative shocks to...

This paper examines how the price-setting process for Initial Public Offerings (IPOs) is influenced by Securities and Exchange Commission (SEC) regulations. The findings indicate a significant positive relation between underpricing and the presence of a regulatory constraint requiring an...

Material-Adverse-Change (MACs) clauses in merger agreements allow for the allocation of risk between the target and acquirer over the time period from the announcement to the completion of the acquisition. I find that MACs are more prevalent as a condition for completing the acquisition than any...

Using a sample of 11,629 firm-years between 1993 and 1998, I examine the investment policies of firms in Japanese industrial groups. My findings indicate that internal capital markets among keiretsu firms are active. Investment at the firm level is positively correlated with cash flows from the...

I provide evidence on the inefficient internal capital market hypothesis by examining the separation of a conglomerate through a spinoff. I document that (i) pre-spinoff firms are valued less than a portfolio of the industry matched single segment firms be cause headquarters allocates funds...