Judicial Valuation Behavior: Some Evidence from Bankruptcy

15 Pages Posted: 31 Aug 2005

See all articles by Keith Sharfman

Keith Sharfman

St. John's University School of Law

Abstract

This Article presents an empirical study of judicial valuation in the bankruptcy context, focusing on twenty-four valuation disputes in which a bankruptcy judge reached a valuation outcome between the values contended for by the parties. Two main findings emerged from the cases studied: (1) bankruptcy judges on average allocated 65.2% of the value in controversy to debtors and 34.8% to secured creditors; and (2) bankruptcy judges were more than three times as likely to allocate most of the value in controversy to debtors as they were to secured creditors. These results lend empirical support to the behaviorist intuition that loss aversion bias informs judicial decisionmaking and may have further implications for substantively neutral reform of the processes whereby valuation disputes are resolved.

Keywords: bankruptcy, valuation, behavioral, empirical, law, economics

Suggested Citation

Sharfman, Keith, Judicial Valuation Behavior: Some Evidence from Bankruptcy. Florida State University Law Review, Vol. 32, p. 387, 2005, Rutgers School of Law-Newark Research Paper No. 006, Available at SSRN: https://ssrn.com/abstract=791665

Keith Sharfman (Contact Author)

St. John's University School of Law ( email )

8000 Utopia Parkway
Jamaica, NY 11439
United States
718-990-6616 (Phone)

HOME PAGE: http://www.stjohns.edu/academics/graduate/law/faculty/Profiles/sharfman

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