Rational deviations from absolute priority rules

Yaacov Bergman; Jeffrey L. Callen

doi:10.1016/1057-5219(95)90003-9

Rational deviations from absolute priority rules

Yaacov Bergman^*, Jeffrey L. Callen

^*Corresponding author for this work

BA Business Department

Research output: Contribution to journal › Article › peer-review

1 Scopus citations

Abstract

This paper uses a sequential bargaining model to analyze bankruptcy reorganizations. It is shown that deviations from absolute priority rules are rational responses by bondholders and the courts to management bargaining power engendered by the formal reorganization process. It is proved that even solvent firms may find it optimal to initiate bankruptcy proceedings. The factors that determine the extent of the deviations are also analyzed.

Original language	English
Pages (from-to)	1-18
Number of pages	18
Journal	International Review of Financial Analysis
Volume	4
Issue number	1
DOIs	https://doi.org/10.1016/1057-5219(95)90003-9
State	Published - 1995

Access to Document

10.1016/1057-5219(95)90003-9

Cite this

@article{c5c3533c37154899b0336f4db4efe50e,

title = "Rational deviations from absolute priority rules",

abstract = "This paper uses a sequential bargaining model to analyze bankruptcy reorganizations. It is shown that deviations from absolute priority rules are rational responses by bondholders and the courts to management bargaining power engendered by the formal reorganization process. It is proved that even solvent firms may find it optimal to initiate bankruptcy proceedings. The factors that determine the extent of the deviations are also analyzed.",

author = "Yaacov Bergman and Callen, {Jeffrey L.}",

year = "1995",

doi = "10.1016/1057-5219(95)90003-9",

language = "אנגלית",

volume = "4",

pages = "1--18",

journal = "International Review of Financial Analysis",

issn = "1057-5219",

publisher = "Elsevier Inc.",

number = "1",

}

TY - JOUR

T1 - Rational deviations from absolute priority rules

AU - Bergman, Yaacov

AU - Callen, Jeffrey L.

PY - 1995

Y1 - 1995

N2 - This paper uses a sequential bargaining model to analyze bankruptcy reorganizations. It is shown that deviations from absolute priority rules are rational responses by bondholders and the courts to management bargaining power engendered by the formal reorganization process. It is proved that even solvent firms may find it optimal to initiate bankruptcy proceedings. The factors that determine the extent of the deviations are also analyzed.

AB - This paper uses a sequential bargaining model to analyze bankruptcy reorganizations. It is shown that deviations from absolute priority rules are rational responses by bondholders and the courts to management bargaining power engendered by the formal reorganization process. It is proved that even solvent firms may find it optimal to initiate bankruptcy proceedings. The factors that determine the extent of the deviations are also analyzed.

UR - http://www.scopus.com/inward/record.url?scp=58149364019&partnerID=8YFLogxK

U2 - 10.1016/1057-5219(95)90003-9

DO - 10.1016/1057-5219(95)90003-9

M3 - ???researchoutput.researchoutputtypes.contributiontojournal.article???

AN - SCOPUS:58149364019

SN - 1057-5219

VL - 4

SP - 1

EP - 18

JO - International Review of Financial Analysis

JF - International Review of Financial Analysis

IS - 1

ER -

Rational deviations from absolute priority rules

Abstract

Access to Document

Other files and links

Fingerprint

Cite this