Professional Fees and Other Direct Costs in Chapter 7 Business Liquidations
75 Washington University Law Quarterly 1207
28 Pages Posted: 15 Aug 2013
Date Written: 1997
Using an empirical analysis from Chapter 7 cases in five judicial districts, this article estimates the direct costs in typical small business Chapter 7s. The article finds that direct costs are lower than commonly portrayed, constituting a mean of 6.1% of total assets of 13.5% of total distributions. Costs did vary substantially across districts. Delay and case complexity were the largest determinant of bankruptcy costs. Most all of the cases involved only a negligible distribution for unsecured creditors.
JEL Classification: K00
Suggested Citation: Suggested Citation