Economics of Bankruptcy Volume I Edited by Edward R. Morrison Professor of Law, University of Chicago Law School, USA ECONOMIC APPROACHES TO LAW An Elgar Research Collection ^ Cheltenham, UK Northampton, MA, USA
Contents Acknowledgements Introduction Edward R. Morrison vu PART I PART II COMPREHENSIVE THEORIES OF BANKRUPTCY LAW 1. Thomas H. Jackson (1982), 'Bankruptcy, Non-Bankruptcy Entitlements, and the Creditors' Bargain', Yale Law Journal, 91 (5), April, 857-907 2. Douglas G. Baird and Thomas H. Jackson (1984), 'Corporate Reorganizations and the Treatment of Diverse Ownership Interests: A Comment on Adequate Protection of Secured Creditors in Bankruptcy', University of Chicago Law Review, 51 (1), Winter, 97-130 3. Douglas G. Baird (1986), 'The Uneasy Case for Corporate Reorganizations', Journal of Legal Studies, XV (1), January, 127-47 4. Samiiel A. Rea, Jr. (1984), 'Arm-Breaking, Consumer Credit and Personal Bankruptcy', Economic Inquiry, XXII (2), April, 188-208 5. Thomas H. Jackson (1986), 'The Fresh-Start Policy in Bankruptcy Law', in The Logic and Limits of Bankruptcy Law, Chapter 10, Cambridge, MA and London, UK: Harvard University Press, 225-52 COLLECTIVE DECISION-MAKING BEFORE BANKRUPTCY ix 3 54 88 109 130 A Theory 6. Randal C. Picker (1992), 'Security Interests, Misbehavior, and Common Pools', University of Chicago Law Review, 59 (2), Spring, 645-79 7. Patrick Bolton and David S. Scharfstein (1996), 'Optimal Debt Structure and the Number of Creditors', Journal of Political Economy, 104 (1), February, 1-25 8. Arturo Bris and Ivo Welch (2005), 'The Optimal Concentration of Creditors', Journal of Finance, LX (5), October, 2193-212 9. Barry E. Adler (1993), 'Financial and Political Theories of American Corporate Bankruptcy', Stanford Law Review, 45 (2), January, 311-46 10. Robert K. Rasmussen (1992), 'Debtor's Choice: A Menu Approach to Corporate Bankruptcy', Texas Law Review, 71 (1), 51-121 163 198 223 243 279
vi Economics of Bankruptcy / 11. Alan Schwartz (1997), 'Contracting About Bankruptcy', Journal of Law, Economics, and Organization, 13 (1), April, 127-46 12. Barry E. Adler (1997), 'A Theory of Corporate Insolvency', New York University Law Review, 72, 343-82 350 370 B Evidence PART III 13. Edward R. Morrison (2009), 'Bargaining Around Bankruptcy: Small Business Workouts and State LawJournal of Legal Studies, 38 (2), June, 255-307 14. Julian Franks and Oren Sussman (2005), 'Financial Distress and Bank Restructuring of Small to Medium Size UK Companies', Review of Finance, 9(1), 65-96 15. Sergei A. Davydenko and Julian R. Franks (2008), 'Do Bankruptcy Codes Matter? A Study of Defaults in France, Germany, and the U.KJournal of Finance, LXIII (2), April, 565-608 16. Stuart C. Gilson (1997), 'Transactions Costs and Capital Structure Choice: Evidence from Financially Distressed Firms', Journal of Finance, LII (1), March, 161-96 ASSET DEPLOYMENT DECISIONS IN BANKRUPTCY 17. Andrei Shleifer and Robert W. Vishny (1992), 'Liquidation Values and Debt Capacity: A Market Equilibrium Approach', Journal of Finance, XLVII (4), September, 1343-66 18. Todd C. Pulvino (1998), 'Do Asset Fire Sales Exist? An Empirical Investigation of Commercial Aircraft Transactions', Journal of Finance, LIII (3), June, 939-78 19. Per Stromberg (2000), 'Conflicts of Interest and Market Illiquidity in Bankruptcy Auctions: Theory and Test s!, Journal of Finance, LV (6), December, 2641-92 20. Sugato Bhattacharyya and Rajdeep Singh (1999), 'The Resolution of Bankruptcy by Auction: Allocating the Residual Right of Design', Journal of Financial Economics, 54 (3), December, 269-94 21. Lucian Arye Bebchuk (1988), 'A New Approach to Corporate Reorganizations', Harvard Law Review, 101, 775-804 22. Philippe Aghion, Oliver Hart and John Moore (1992), 'The Economics of Bankruptcy Reform', Journal of Law, Economics, and Organization, 8 (3), October, 523-46 23. Douglas G. Baird and Robert K. Rasmussen (2002), 'The End of Bankruptcy', Stanford Law Review, 55 (3), December, 751-89 24. Douglas G. Baird and Robert K. Rasmussen (2003), 'Reply: Chapter 11 at Twilight', Stanford Law Review, 56 (3), December, 673-99 413 466 498 542 581 605 645 697 723 753 111 816
Economics of Bankruptcy Volume II Edited by Edward R. Morrison Professor of Law, University of Chicago La w School, USA ECONOMIC APPROACHES TO LAW An Elgar Research Collection & Cheltenham, UK Northampton, MA, USA
Contents Acknowledgements An introduction to both volumes by the editor appears in Volume I ix PART I BUSINESS BANKRUPTCY IN PRACTICE A Bankruptcy Costs 1. Arturo Bris, Ivo Welch and Ning Zhu (2006), The Costs of Bankruptcy: Chapter 7 Liquidation versus Chapter 11 Reorganization', Journal of Finance, LXI (3), June, 1253-303 5 2. Gregor Andrade and Steven N. Kaplan (1998), 'How Costly is Financial (Not Economic) Distress? Evidence from Highly Leveraged Transactions that Became Distressed', Journal of Finance, LIII (5), October, 1443-93 56 B Filtering Viable from Non-viable Firms 3. Lawrence A. Weiss and Karen H. Wruck (1998), 'Information Problems, Conflicts of Interest, and Asset Stripping: Chapter 11 's Failure in the Case of Eastern Airlines', Journal of Financial Economics, 48 (1), April, 55-97 109 4. Michelle J. White (1994), 'Corporate Bankruptcy as a Filtering Device: Chapter 11 Reorganizations and Out-of-Court Debt Restructurings', Journal of Law, Economics, and Organization, 10 (2), October, 268-95 152 5. Matthias Kahl (2002), 'Economic Distress, Financial Distress, and Dynamic Liquidation', Journal of Finance, LVII (1), February, 135-68 180 6. Vojislav Maksimovic and Gordon Phillips (1998), 'Asset Efficiency and Reallocation Decisions of Bankrupt Firms', Journal of Finance, LIII (5), October, 1495-532 214 7. Edward R. Morrison (2007), 'Bankruptcy Decision Making: An Empirical Study of Continuation Bias in Small-Business Bankruptcies', Journal of Law and Economics, 50 (2), May, 381-419 252
vi Economics of Bankruptcy II C Ex Ante Investment Incentives Generally: Theory and Evidence 8. Robert Gertner and David Scharfstein (1991), 'A Theory of Workouts and the Effects of Reorganization Law', Journal of Finance, XLVI (4), September, 1189-222 293 9. Wei Fan and Michelle J. White (2003), 'Personal Bankruptcy and the Level of Entrepreneurial Activity', Journal of Law and Economics, XLVI (2), October, 543-67 327 10. Jeremy Berkowitz and Michelle J. White (2004), 'Bankruptcy and. Small Firms' Access to Credit', RAND Journal of Economics, 35 (1), Spring, 69-84 352 11. Douglas G. Baird and Edward R. Morrison (2005), 'Serial Entrepreneurs and Small Business Bankruptcies', Columbia Law Review, 105 (8), December, 2310-68 368 D Ex Ante Effects of Particular Bankruptcy Rules 12. Lucian Arye Bebchuk (2002), 'Ex Ante Costs of Violating Absolute Priority in Bankruptcy', Journal of Finance, LVII (1), February, 445-60 429 13. Kenneth Ayotte (2007), 'Bankruptcy and Entrepreneurship: The Value of a Fresh Start', Journal of Law, Economics, and Organization, 23 (1), April, 161-85 445 14. Douglas G. Baird and Donald S. Bernstein (2006), 'Absolute Priority, Valuation Uncertainty, and the Reorganization Bargain', Yale Law Journal, 115 (8), June, 1930-70 470 15. Yeon-Koo Che and Alan Schwartz (1999),' Section 365, Mandatory Bankruptcy Rules and Inefficient Continuance', Journal of Law, Economics, and Organization, 15 (2), July, 441-67 511 16. Barry E. Adler (1995), 'A Re-Examination of Near-Bankruptcy Investment Incentives', University of Chicago Law Review, 62 (2), Spring, 575-606 538 17. George G. Triantis (1993), 'ATheory of the Regulation of Debtorin-Possession Financing', Vanderbilt Law Review, 46, 901-35 570 E Other Topics: Industry Conditions and Forum Shopping 18. Severin Borenstein and Nancy L. Rose (1995), 'Bankruptcy and Pricing Behavior in U.S. Airline Markets', American Economic Review: Papers and Proceedings, 85 (2), May, 397-402 607
Economics of Bankruptcy II vii PART II CONSUMER BANKRUPTCY IN THEORY AND PRACTICE A Effects on Consumer Behavior 19. Barry Adler, Ben Polak and Alan Schwartz (2000), 'Regulating Consumer Bankruptcy: A Theoretical Inquiry', Journal of Legal Studies, XXIX (2), June, 585-613 617 B Effects on Credit Markets 20. Scott Fay, Erik Hurst and Michelle J. White (2002), 'The Household Bankruptcy Decision', American Economic Review, 92 (3), June, 706-18 649 21. Reint Gropp, John Karl Scholz and Michelle J. White (1997), 'Personal Bankruptcy and Credit Supply and Demand', Quarterly Journal of Economics, CXII (1), February, 217-51 662