Abstract

http://ssrn.com/abstract=1573311
 
 

References (28)



 
 

Citations (6)



 


 



The Ownership and Trading of Debt Claims in Chapter 11 Restructurings


Victoria Ivashina


Harvard University; National Bureau of Economic Research (NBER)

Benjamin Charles Iverson


Northwestern University - Kellogg School of Management

David C. Smith


University of Virginia - McIntire School of Commerce

June 5, 2015

AFA 2011 Denver Meetings Paper
Journal of Financial Economics (JFE), Forthcoming

Abstract:     
Using a novel data set that covers individual debt claims against 136 bankrupt US companies and includes information on a subset of claims transfers, we provide new empirical insight regarding how a firm’s debt ownership relates to bankruptcy outcomes. Firms with higher debt concentration at the start of the case are more likely to file prearranged bankruptcy plans, to move quickly through the restructuring process, and to emerge successfully as independent going concerns. Moreover, higher ownership concentration within a debt class is associated with higher recovery rates to that class. Trading of claims during bankruptcy concentrates ownership further, but this trading is not associated with subsequent improvements in bankruptcy outcomes and could, at the margin, increase the likelihood of liquidation.

Number of Pages in PDF File: 47

Keywords: Chapter 11; Ownership structure; Distressed debt; Trading in bankruptcy

JEL Classification: G23, G30, G33


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Date posted: March 19, 2010 ; Last revised: June 6, 2015

Suggested Citation

Ivashina, Victoria and Iverson, Benjamin Charles and Smith, David C., The Ownership and Trading of Debt Claims in Chapter 11 Restructurings (June 5, 2015). AFA 2011 Denver Meetings Paper; Journal of Financial Economics (JFE), Forthcoming. Available at SSRN: http://ssrn.com/abstract=1573311 or http://dx.doi.org/10.2139/ssrn.1573311

Contact Information

Victoria Ivashina
Harvard University ( email )
Harvard Business School
Baker Library 233
Boston, MA 02163
United States
National Bureau of Economic Research (NBER) ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Benjamin Charles Iverson
Northwestern University - Kellogg School of Management ( email )
Evanston, IL 60208
United States
David Carl Smith (Contact Author)
University of Virginia (UVA) - McIntire School of Commerce ( email )
P.O. Box 400173
Charlottesville, VA 22904-4173
United States
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