Titolo
Should bankruptcy proceedings be initiated by a mixed creditor/shareholder?
Periodico
European University Institute of Badia Fiesolana (Fi). Department of Economics - Working papers
Anno: 1991 - Fascicolo: 48 - Pagina iniziale: 1 - Pagina finale: 11

This paper investigates whether or not bankruptcy proceedings should be initiated by an investor (or a group of investors) owning positive proportions of each type of security issued by the firm. We show that under certainty such an investor, called here a mixed creditor/shareholder, always has a strong incentive for value-maximization, while other investors may only have a weak incentive. We also shew that under uncertainty, a mixed creditor/shareholder has less incentive to make decisions that benefit one class of investors at the expense of another. And when he holds equal percentages of debt and equity he always has a strong incentive to make exactly the right decision.



Testo completo: http://hdl.handle.net/1814/387

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