Bankruptcy

Bankruptcy Law and Entrepreneurship

by Douglas Cumming

Armour, J., and D.J.. Cumming, 2008. “Bankruptcy Law and Entrepreneurship” American Law and Economics Review 10(2): 303-350.
- Reviewed in James Surowiecki, April 7, 2008, “Going for Broke” in The New Yorker http://www.newyorker.com/talk/financial/2008/04/07/080407ta_talk_surowiecki

Entrepreneurs, catalysts for innovation in the economy, are increasingly the object of policymakers’ attention. Recent... more Entrepreneurs, catalysts for innovation in the economy, are increasingly the object of policymakers’ attention. Recent initiatives both in the UK and at EU level have sought to promote entrepreneurship by reducing the harshness of the consequences of personal bankruptcy law. Whilst there is an intuitive link between the two, relatively little attention has been paid to the question empirically, particularly in the international context. We investigate the link between bankruptcy and entrepreneurship using data on self employment over 16 years (1990-2005) and 15 countries in Europe and North America. We compile new indices reflecting how ‘forgiving’ personal bankruptcy laws are, reflecting the time to discharge. These measures vary over time and across the countries studied. We show that bankruptcy law has a statistically and economically significant effect on self employment rates when controlling for GDP growth, MSCI stock returns, and a variety of other legal and economic factors. The results have clear implications for policymakers.

From Whipped Cream to Multibillion Euro Financial Collapse: The European Regulation on Transnational Insolvency In Action

by Matteo Winkler

A Brief History of Bankruptcy

by J. Holder Bennett

How much can corporate bankruptcy rules and practices teach us about sovereign default?

by Eilidh Douglas

Settle Your Debts With These 5 Services from a Bankruptcy Lawyer

by Marie Kohan

Empirical Dimensions of Consumer Bankruptcy: Results from a Survey of Canadian Bankrupts, The

by Saul Schwartz

Osgoode Hall Law Journal (1999)

Student Loans and Bankruptcy

by John Tarrant

(2010) 24(1) Commercial Law Quarterly 3-10.

The Implications for Bankruptcy of the Severance of a Joint Tenancy

by John Tarrant

(2005) 13 Insolvency Law Journal 243.

The Complex Interaction of Limitation of Actions and Bankruptcy Legislation

by John Tarrant

(2006) 14 Insolvency Law Journal 192.

Normative Bricolage: Informal Rule Making by Accountants and Lawyers in Mega Insolvencies

by John Flood

Co-authored with E Skordaki and published in GLOBAL LAW WITHOUT A STATE, G. Teubner, ed., pp. 109-131, Dartmouth: Aldershot, 1997

The Maxwell bankruptcy was the first big international insolvency, one that moved into primary proceedings... more The Maxwell bankruptcy was the first big international insolvency, one that moved into primary proceedings simultaneously in London and New York. This set up a battle between British administration and US Chapter 11. The intervention by certain individuals who had thought about the consequences of such bankruptcies, including lawyers and judges, enabled a private system of law to emerge to handle these incommensurable systems.

The Vultures Fly East: The Creation and Globalisation of the Distressed Debt Market

by John Flood

ADAPTING LEGAL CULTURES, D. Nelken, ed., pp 257-278, Oxford: Hart, 2001

Corporate insolvency and bankruptcy have given rise to new markets, including global ones, in which lawyers have been... more Corporate insolvency and bankruptcy have given rise to new markets, including global ones, in which lawyers have been key players. This paper examines the role of lawyers in informal restructuring through an analysis of the London Approach and the rise of the distressed debt market.

The diagnosis of bankruptcy risk using score function

by Lecturer Dr. Lidia Mandru

Quotation details:

Mândru Lidia, Khashman Adnan, Cârstea Claudia Georgeta, David Nicoleta, Pătraşcu Lucian, "The Diagnosis of Bankruptcy Risk Using Score Function", 9th WSEAS International ISI Conference on Artificial Intelligence, Knowledge Engineering and Databases (AIKED'10), University of Cambridge, World Scientific and Engineering Academy and Society (WSEAS) Press, United Kingdom, 20-22 February 2010, ISBN 978-960-474-154-0, ISSN 1790-5109

Modeling share prices of banks and bankrupts

by Ivan Kitov

Profili fiscali sugli effetti delle soluzioni negoziali della crisi- le plusvalenze

by Alessandro Giannelli

Finansal raporlama sistemlerinin bilginin ihtiyaca uygunluğu açısından değerlendirilmesi: İMKB Şirketlerinde finansal başarısızlık tahminleri yönüyle bir …

by Dr. Fevzi Serkan OZDEMIR

From Whipped Cream to Multibillion Financial Collapse: The European Regulation on Transnational Insolvency In Action

by Matteo Winkler

Debt Enforcement and Relational Contracting

by Marta Serra-Garcia

Corporate Reputation and Cost of Debt

by Celim Yildizhan

Although the theoretical literature since Milgrom and Roberts (1982) and Diamond (1989) has recognized that reputation... more Although the theoretical literature since Milgrom and Roberts (1982) and Diamond (1989) has recognized that reputation should impact credit relationships, that impact has never been fully quantified. We show that firm reputation - the intangible way in which a company is perceived by others - plays an important role in determining corporate cost of debt. We measure a company's reputation using the annual ranking of "Most Admired Companies" published by Fortune magazine, which surveys industry experts about firm reputations. After controlling for credit risk and other determinants of credit spreads, we find a robust inverse relationship between a firm's reputation as measured by the Fortune survey and the credit spread on its bonds. We also find this effect to be greater for firms that are subject to greater information asymmetry. By explicitly accounting for an intangible element of credit risk, we substantially improve upon the existing literature which, relying on more tangible factors, concludes that a large component of credit spread variation remains unexplained. We also show that the Fortune reputation score is a good ex ante predictor of corporate failure, improving upon standard measures used in the literature.

Macroeconomic Effects of Bankruptcy & Foreclosure Policies

by Kurt Mitman

PIER Working Paper 11-015

Bankruptcy laws govern consumer default on unsecured credit. Foreclosure laws regulate default on secured mortgage... more Bankruptcy laws govern consumer default on unsecured credit. Foreclosure laws regulate default on secured mortgage debt. I investigate to what extent differences in foreclosure and bankruptcy laws can jointly explain variation in default rates across states. I construct a general equilibrium model where heterogeneous infinitely-lived households have access to unsecured borrowing and can finance housing purchases with mortgages. Households can default separately on both types of debt. The model is calibrated to match national foreclosure and bankruptcy rates and aggregate statistics related to household net worth and debt. The model can account for 83% of the variation in bankruptcy rates due to differences in bankruptcy and foreclosure law. I find that more generous homestead exemptions raise the cost of unsecured borrowing. Households in states with high exemptions therefore hold less unsecured and more mortgage debt compared to low exemption states, which leads to lower bankruptcy rates but higher foreclosure rates. The model also predicts recourse results in higher bankruptcy rates and a higher coincidence of foreclosure and bankruptcy. I use the model to evaluate how proposed and implemented changes to bankruptcy policy affect default rates and welfare. The 2005 Bankruptcy Abuse Prevention and Consumer Protection Act yields large welfare gains (1% consumption equivalent variation) but results in increases in both foreclosure and bankruptcy rates. I find that implementing the optimal joint foreclosure and bankruptcy policy, which is characterized by no-recourse mortgages and a homestead exemption equal to one quarter of median income, yields modest welfare gains (0.3% consumption equivalent variation).

Insolvency proceedings in Ukraine

by Konstantine Olefirenko