Costs and Recovery Rates in the Dutch Liquidation-Based Bankruptcy System

European Journal of Law and Economics, Vol. 26, pp. 105-127, 2008

Posted: 2 Oct 2008

See all articles by Oscar Couwenberg

Oscar Couwenberg

University of Groningen - Faculty of Spatial Sciences

Abe de Jong

Rotterdam School of Management, Erasmus University; Monash University

Multiple version iconThere are 2 versions of this paper

Date Written: July 10, 2008

Abstract

We present evidence on the efficiency of the resolution of financial distress in bankruptcy in The Netherlands. Direct costs average 16%, firm recovery 37% and bank debt recovery 80%. The direct costs are lower in larger firms and in firms with more bank debt. Costs increase with the time it takes to sell assets. Firm recovery is influenced by asset structure, capital structure and to a lesser extent Dutch legal variables. However, the opportunity to continue operations in bankruptcy is chosen by about half the firms and this has a positive effect on recoveries.

Keywords: Bankruptcy, Liquidation, Direct costs, Recovery rates

JEL Classification: G33, K22

Suggested Citation

Couwenberg, Oscar and de Jong, Abe, Costs and Recovery Rates in the Dutch Liquidation-Based Bankruptcy System (July 10, 2008). European Journal of Law and Economics, Vol. 26, pp. 105-127, 2008. Available at SSRN: https://ssrn.com/abstract=1274110

Oscar Couwenberg (Contact Author)

University of Groningen - Faculty of Spatial Sciences ( email )

P.O. Box 800
9700 AV Groningen
Netherlands
31 50 363 3907 (Phone)

HOME PAGE: http://www.rug.nl/staff/o.couwenberg/?lang=en

Abe De Jong

Rotterdam School of Management, Erasmus University ( email )

P.O. Box 1738
Room T08-25
Rotterdam, 3000 DR
Netherlands
+31 10 408 1022 (Phone)

HOME PAGE: http://https://www.rsm.nl/people/abe-de-jong/

Monash University ( email )

900 Dandenong Rd
Room H3-56
Caulfield East, Victoria 3145
Australia

HOME PAGE: http://https://research.monash.edu/en/persons/abe-de-jong

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