A theory of workouts and the effects of reorganization law

Article Abstract:

We present a model of a financially distressed firm with outstanding bank debt and public debt. Coordination problems among public debtholders introduce investment inefficiencies in the workout process. In most cases, these inefficiencies are not mitigated by the ability of firms to buy back their public debt with cash and other securities - the only feasible way that firms can restructure their public debt. We show that Chapter 11 reorganization law increases investment, and we characterize the types of corporate financial structures for which this increased investment enhances efficiency. (Reprinted by permission of the publisher.)

Management, Interpretation and construction, Laws, regulations and rules, Bankruptcy law, National debt, Public debts, External debt relief, Debt relief, Bankruptcy reorganizations, Bankruptcy reorganization

---

Initial shareholdings and overbidding in takeover contests

Article Abstract:

Within the context of takeovers, this paper shows that in private-value auctions the optimal individually rational strategy for a bidder with partial ownership of the item is to overbid, i.e., to bid more than his valuation. This strategy, however, can lead to (i) an inefficient outcome, and (ii) the winning bidder making a net loss. Further, the overbidding result implies that the presence of a large shareholder increases the bid premium in single-bidder takeovers at the expense of reducing the probability of the takeover actually occurring. (Reprinted by permission of the publisher.)

Analysis, Acquisitions and mergers, Business sale

---

A Partial Theory of Takeover Bids

Article Abstract:

The role of a takeover in settling stockholder disagreements about future production policies is examined. Takeover bid equilibria must match the firms good and the stockholders good in a productive exchange equilibrium. A model is developed to provide a simultaneous change in stockholder and production plans.

Mergers, acquisitions and divestments, Economics

Similar abstracts:

• Abstracts: Perception and biomechanics data in a manual handling task: A comparative study. Technical Note. Examination of the use of fuzzy sets to describe relative speed perception
• Abstracts: Frequent short rest breaks from computer work: effects on productivity and well-being at two field sites. A field study of supplemntary rest breaks for data-entry operators
• Abstracts: Network-centric banking. Terms of Endearment: Quebec and the rest of the country approach constitutional change from very different starting points
• Abstracts: How tax reform affects bad debts, cash flow. Insulated Controlled Disbursing: A Way to Win the War on Fed Float
• Abstracts: Underpricing of newly issued bonds: evidence from the Swiss capital market. An International Study of Tax Effects on Government Bonds

This website is not affiliated with document authors or copyright owners. This page is provided for informational purposes only. Unintentional errors are possible.