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 debtor companies are less likely to have their reorganization plans approved by creditors. Using claim-level voting data in a regression with filing fixed effects, we show that male creditors are less likely than female creditors to approve the same plan if the debtor is female-led. This behavior doesn't exist for male-led debtors and is more salient for female-led debtors facing high losses. If reorganized, female-led debtors achieve higher survival rates and higher return on assets than male-led debtors, suggesting a gender-based double standard for plan approval. Our findings are consistent with a model of 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