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The Economics of Corporate Reorganization

N. S. Buchanan

University of California, Berkeley

Quarterly Journal of Economics 1939

I. The meaning of “failure” and “reorganization,” 29. — II. The economics of reorganization. Liquidation value of the assets: specialization, 32; separability, 33; costs of liquidation, 34. — Value in reorganization, 35. — Uncertainty of computations, 37. — Readjustment of claims: the “absolute priority rule,” 38. — Difficulties: conflicting valuations, 40; inducing new investment, 41. — III. Comparison of procedures. The major problems to be solved: deciding upon reorganization or liquidation, 44; procuring new capital, 46; dealing with dissenting minorities, 47; ensuring independent and disinterested review, 48; keeping costs down, 49.

DOI
10.1093/qje/54.1_part_1.28
Volume
54 (1 Part 1)
Pages
28-50
Language
en
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