Gender Gap in Corporate Reorganizations

Abstract

We study how gender affects renegotiation with creditors. Using reorganization filings in the state of São Paulo in Brazil, we document that female-led debtors are 9 percentage points less likely to have their reorganization plans approved by creditors. The gender gap widens to 32 percentage points for high-loss debtors. This effect is not driven by differences in liquidation values or reorganization contracts. Using claim-level voting data, we show that the gender gap can be entirely attributed to male creditors. In line with a gender-based double standard for plan approval, female-led debtors have higher survival rates and higher return on assets after reorganization. Our findings are consistent with male creditors overextrapolating past losses of female-led debtors.

Keywords: distressed debt, Chapter 11, Corporate bankruptcy, corporate reorganization, gender discrimination

JEL Classification: G32, G33, G38, J16, K22