Optimal Debt And Equity Values in The Presence of Chapter 7 And Chapter 11  

Oleh:

Broadie, Mark ; Chernov, Mikhail ; Sundaresan, Suresh M.

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Journal of Finance (EBSCO) vol. 62 no. 3 (Jun. 2007), page 1341-1378.
Topik: equity; studies; liquidation; debt; bankruptcy reorganization; conflicts of interest
Fulltext: p 1341.pdf (555.19KB)

Ketersediaan

Perpustakaan Pusat (Semanggi) Nomor Panggil: JJ88 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Isi artikel

Explicit presence of reorganization in addition to liquidation leads to conflicts of interest between borrowers and lenders. In the first - best outcome, reorganization adds value to both parties via higher debt capacity, lower credit spreads, and improved overall firm value. If control of the ex ante reorganization timing and the ex post decision to liquidate is given to borrowers, most of the benefits are appropriated by borrowers ex post. Lenders can restore the first -b est outcome by seizing this control or by the ex post transfer of control rights. Reorganization is more likely and liquidation is less likely relative to the benchmark case with liquidation only.

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