The Importance of Deviations from the Absolute Priority Rule in Chapter 11 Bankruptcy Proceedings

Financial Management, Vol. 27, No. 4, Winter, 1998

Posted: 9 Feb 1999

See all articles by Allan Eberhart

Allan Eberhart

Georgetown University

Lawrence A. Weiss

Tufts University - The Fletcher School

Abstract

Departures from the absolute priority rule (APR) in Chapter 11 bankruptcy proceedings have been of great interest to finance scholars throughout the 1990s. In a recent article, Beranek, Boehmer, and Smith (1996, BBS) criticize three of the early articles in this area Franks and Torous (1989), Eberhart, Moore, and Roenfeldt (1990), and Weiss (1990); collectively called the priority papers), among others. This paper reviews the BBS paper, explains why APR violations have been interesting to finance researchers, and documents the validity of the priority papers? focus.

JEL Classification: G31, G32, G33

Suggested Citation

Eberhart, Allan and Weiss, Lawrence A., The Importance of Deviations from the Absolute Priority Rule in Chapter 11 Bankruptcy Proceedings. Financial Management, Vol. 27, No. 4, Winter, 1998, Available at SSRN: https://ssrn.com/abstract=144620

Allan Eberhart (Contact Author)

Georgetown University ( email )

McDonough School of Business
Washington, DC 20057
United States
202-687-4584 (Phone)

Lawrence A. Weiss

Tufts University - The Fletcher School ( email )

160 Packard Ave
Medford, MA 02155
United States
6176272735 (Phone)
6176273712 (Fax)

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