Abstract

http://ssrn.com/abstract=685825
 
 

References (22)



 
 

Citations (7)



 


 



A Study of Inefficient Going Concerns in Bankruptcy


Julian R. Franks


London Business School; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI)

Gyongyi Loranth


Centre for Economic Policy Research (CEPR)


AFA 2006 Boston Meetings Paper

Abstract:     
This paper provides the first large-scale study measuring the bias in favour of going concerns induced by court-administered bankruptcy procedures. Although we find that the large majority of bankrupt firms in our sample are kept as going concerns, the evidence suggests that they sharply reduce aggregate proceeds to pre-bankruptcy creditors, and almost three quarters are eventually closed and sold piecemeal. These results arise because of the combination of poor court oversight and the compensation scheme awarded to the trustee, managing the bankrupt company. This suggests the particular architecture of court-administered codes can give rise to very different levels of inefficiency.

Number of Pages in PDF File: 45

Keywords: G21, G30, G33

JEL Classification: G21, G30, G33

working papers series


Download This Paper

Date posted: March 26, 2005  

Suggested Citation

Franks, Julian R. and Loranth, Gyongyi, A Study of Inefficient Going Concerns in Bankruptcy. AFA 2006 Boston Meetings Paper. Available at SSRN: http://ssrn.com/abstract=685825 or http://dx.doi.org/10.2139/ssrn.685825

Contact Information

Julian R. Franks
London Business School ( email )
Institute of Finance and Accounting
Sussex Place - Regent's Park
London NW1 4SA
United Kingdom
+44 20 7262 5050 x3449 (Phone)
+44 20 7724 3317 (Fax)
Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
European Corporate Governance Institute (ECGI)
c/o ECARES ULB CP 114
B-1050 Brussels
Belgium
HOME PAGE: http://www.ecgi.org
Gyongyi Loranth (Contact Author)
Centre for Economic Policy Research (CEPR) ( email )
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
Feedback to SSRN


Paper statistics
Abstract Views: 1,901
Downloads: 305
Download Rank: 51,498
References:  22
Citations:  7

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo1 in 0.390 seconds