Ex Ante Costsof Violating Absolute Priority in Bankruptcy  

Oleh:

Bebchuk, Lucian Arye

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Journal of Finance (EBSCO) vol. 57 no. 1 (2002), page 445-460.
Topik: BANKRUPTCY; bankruptcy laws; studies
Fulltext: p 445.pdf (94.32KB)

Ketersediaan

Perpustakaan Pusat (Semanggi) Nomor Panggil: JJ88.5 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Isi artikel

A basic question for the design of bankruptcy law concerns whether value should be divided in accordance with absolute priority. Research done in the past decade has suggested that deviations from absolute priority have beneficial ex ante effects. In contrast, this paper shows that ex post deviations form absolute priority also have negative effects on ex ante decisions taken by shareholders. Such deviations aggravate the moral hazard problem with respect to project choice increasing the equity holder's incentive to favor risky projects, as well as with respect to borrowing and dividend decisions.

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