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http://ssrn.com/abstract=868568
 
 

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The Costs of Bankruptcy


Arturo Bris


IMD International; European Corporate Governance Institute (ECGI); Yale University - International Center for Finance

Ivo Welch


University of California, Los Angeles (UCLA); National Bureau of Economic Research (NBER)

Ning Zhu


China Academy of Financial Research (CAFR); Yale School of Management; University of California, Davis - Graduate School of Management


Journal of Finance, Forthcoming
Yale ICF Working Paper No. 04-13
AFA 2005 Philadelphia Meetings Paper

Abstract:     
Our paper explores a comprehensive sample of small and large corporate bankruptcies in Arizona and New York from 1995-2001. We find that bankruptcy costs are very heterogeneous and sensitive to measurement method. Still, Chapter 7 liquidations appear no faster or cheaper (in terms of direct expense) than Chapter 11 bankruptcies. But Chapter 11 seems to preserve assets better, and thereby allows creditors to recover relatively more. Our paper also provides a large number of further empirical regularities.

Number of Pages in PDF File: 81

JEL Classification: G33, K22, G28

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Date posted: December 7, 2005  

Suggested Citation

Bris, Arturo and Welch, Ivo and Zhu, Ning, The Costs of Bankruptcy. Journal of Finance, Forthcoming; Yale ICF Working Paper No. 04-13; AFA 2005 Philadelphia Meetings Paper. Available at SSRN: http://ssrn.com/abstract=868568

Contact Information

Arturo Bris (Contact Author)
IMD International ( email )
Ch. de Bellerive 23
P.O. Box 915
CH-1001 Lausanne
Switzerland
European Corporate Governance Institute (ECGI)
c/o ECARES ULB CP 114
B-1050 Brussels
Belgium
HOME PAGE: http://www.ecgi.org
Yale University - International Center for Finance ( email )
Box 208200
New Haven, CT 06520
United States
Ivo Welch
University of California, Los Angeles (UCLA) ( email )
405 Hilgard Avenue
Box 951361
Los Angeles, CA 90095
United States
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Ning Zhu
China Academy of Financial Research (CAFR)
1954 Huashan Road
Shanghai P.R.China, 200030
China

Yale School of Management ( email )
135 Prospect Street
Box 208200
New Haven, CT 06520-8200
United States
HOME PAGE: http://pantheon.yale.edu/~nz26/
University of California, Davis - Graduate School of Management ( email )
One Shields Avenue
Davis, CA 95616
United States
530-752-3871 (Phone)
530-752-2924 (Fax)
HOME PAGE: http://www.gsm.ucdavis.edu/Faculty/Zhu/
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