DefaultRisk.com the web's biggest credit risk modeling resource.

Credit Jobs

Home Glossary Links FAQ / About Site Guide Search
pa_recov_17


Submit Your Paper

In Rememberance: World Trade Center (WTC)

Export citation to:
- HTML
- Text (plain)
- BibTeX
- RIS
- ReDIF

Chatterjee, Sris, Upinder S. Dhillon, and Gabriel G. Ramirez, "Resolution of Financial Distress: Debt Restructurings via Chapter 11, Prepackaged Bankruptcies, and Workouts", Financial Management Journal, (Spring 1996), Vol. 25, No. 1, pp. 5-18.

Abstract: This paper examines empirically a comprehensive sample of firms undertaking Chapter 11 reorganizations, prepackaged bankruptcies, and workouts. We provide evidence that the restructuring decision depends on the degree of the firm's leverage, the severity of its liquidity crisis, the extent of creditor's coordination, and the magnitude of its economic distress. The results complement theoretical models of debt restructuring choices. We find that economically viable firms prefer workouts. Further, prepackaged bankruptcies are used by firms that are economically viable but face immediate liquidity problems.