The Resolution of Financial Distress

@inproceedings{Giammarino1998TheRO,
  title={The Resolution of Financial Distress},
  author={Ronald M. Giammarino},
  year={1998}
}
  • Ronald M. Giammarino
  • Published 1998
Most models of financial structure embody an assumption about financial distress that causes debt to be costly to the issuing firm. This approach has been criticized on the grounds that the assumed costs could be avoided by a costless financial reorganization. In this article we show that despite the possibility of costless reorganization, it may be rational for firms to incur significant costs in the resolution of financial distress. The main assumptions that give rise to our results are the… CONTINUE READING
Highly Cited
This paper has 36 citations. REVIEW CITATIONS

From This Paper

Topics from this paper.

References

Publications referenced by this paper.
Showing 1-10 of 36 references

Incentive Compatible Debt Contracts: The One-Period Problem,

D. Gale, M. Hellwig
Review of Economic Studies, • 1985
View 4 Excerpts
Highly Influenced

Reorganization in Bankruptcy and the Issue of Strategic Risk,

V. A. Aivazian, J. L. Callen
Journal of Banking and Finance, • 1983
View 7 Excerpts
Highly Influenced

Signalling Games and Stable Equilibrium,

I. Cho, D. M. Kreps
Quarterly Journal of Economics, • 1987
View 4 Excerpts
Highly Influenced

The Logic and Limits of Bankruptcy Law

T. H. Jackson
1986
View 3 Excerpts
Highly Influenced

Optimal Initiation of Bankruptcy Proceedings by Debt Holders,

J. C. Van Horne
Journal of Finance, • 1976
View 3 Excerpts
Highly Influenced

Bankruptcy and Agency Costs: Their Significance to the Theory of Optimal Capital Structure,

R. A. Haugen, W L.
Senbet, • 1988
View 1 Excerpt

Capital Structure and Imperfect Competition in Product Markets,

F. Allen
Rodney White Working Paper • 1987
View 2 Excerpts

Equilibrium Selection in Signalling

J. S. Banks, J. Sobel
Games,” Econometrica, • 1987
View 1 Excerpt

Liability , Litigation , and Incentives to Take Care

J. F. Reinganum, L. L. Wilde
Journal of Public Economics • 1987

The Importance of Incomplete Information in Explaining the Existence of Costly Bankruptcy,

D. C. Webb
Economica, • 1987
View 2 Excerpts

Similar Papers

Loading similar papers…