Abstract

http://ssrn.com/abstract=2156045
 
 

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Get in Line: Chapter 11 Restructuring in Crowded Bankruptcy Courts


Benjamin Charles Iverson


Northwestern University - Kellogg School of Management

March 20, 2014


Abstract:     
This paper tests whether Chapter 11 restructuring outcomes are affected by time constraints in busy bankruptcy courts. Using the passage of the Bankruptcy Abuse Prevention and Consumer Protection Act as an exogenous shock to caseloads, I find that as bankruptcy judges become busier they allow more firms to reorganize and liquidate fewer firms. Firms that reorganize in busy courts spend longer in bankruptcy, while firms that are dismissed from busy courts are more likely to re-file for bankruptcy within three years of their original filing. In addition, commercial banks report higher charge-offs on business lending when bankruptcy caseload increases.

Number of Pages in PDF File: 63

Keywords: Financial distress, bankruptcy, Chapter 11

JEL Classification: G30, G33, G34, K22

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Date posted: October 3, 2012 ; Last revised: April 2, 2014

Suggested Citation

Iverson, Benjamin Charles, Get in Line: Chapter 11 Restructuring in Crowded Bankruptcy Courts (March 20, 2014). Available at SSRN: http://ssrn.com/abstract=2156045 or http://dx.doi.org/10.2139/ssrn.2156045

Contact Information

Benjamin Charles Iverson (Contact Author)
Northwestern University - Kellogg School of Management ( email )
Evanston, IL 60208
United States
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