Why CEOs File Bankruptcy in Delaware

27 Pages Posted: 27 Jun 2007

See all articles by Gregory R. Stone

Gregory R. Stone

University of Nevada, Reno

S. Ghon Rhee

University of Hawaii at Manoa - Shidler College of Business; University of Hawaii at Manoa - Department of Financial Economics and Institutions

Date Written: August 2007

Abstract

During the 1990s Delaware received more large bankruptcy filings than the six next most active bankruptcy courts combined. Interestingly, firms reorganized in Delaware perform more poorly than firms reorganized elsewhere raising the important question of why so many managers choose to file in a venue where the firm is likely to be sub-optimally reorganized and perform more poorly upon emergence. One reason for the increased filings is that CEOs who file in Delaware significantly improve their career prospects relative to CEOs who file elsewhere.

Keywords: Bankruptcy, Delaware, agency theory

JEL Classification: G33, G38

Suggested Citation

Stone, Gregory R. and Rhee, S. Ghon, Why CEOs File Bankruptcy in Delaware (August 2007). Available at SSRN: https://ssrn.com/abstract=995595 or http://dx.doi.org/10.2139/ssrn.995595

Gregory R. Stone (Contact Author)

University of Nevada, Reno ( email )

United States
775 682-9174 (Phone)
775 784-1769 (Fax)

S. Ghon Rhee

University of Hawaii at Manoa - Shidler College of Business ( email )

2404 Maile Way
C-304, FEI/CBA
Honolulu, HI 96822
United States

University of Hawaii at Manoa - Department of Financial Economics and Institutions ( email )

United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
197
Abstract Views
1,836
rank
168,568
PlumX Metrics