Review of Financial Studies Vol. 2 No. 1 1989
Claimholder Incentive Conflicts in Reorganization: The Role of Bankruptcy Law
Abstract
[When a firm is in financial distress, in most cases a set of mutually advantageous reorganization plans exist. This article shows that the bankruptcy code, by providing rules governing the negotiation process, yields a unique solution to the reorganization process. In addition, the structure imposed by the code mitigates the holdout problem created by the individual claimant's divergent incentives.]
- Volume
- 2
- Issue
- 1
- Pages
- 109-123
- Sources
- bibtex:phds-export.bib