TY - JOUR
T1 - Ex-ante efficiency of bankruptcy procedures
AU - Cornelli, Francesca
AU - Felli, Leonardo
PY - 1997/4
Y1 - 1997/4
N2 - This paper suggests a framework to analyze the efficiency properties of bankruptcy procedures, distinguishing between ex-ante and ex-post efficiency. Ex-post efficiency consists in maximizing the ex-post value of the insolvent firm, whereas ex-ante efficiency consists in maximizing the proceeds to creditors from the reorganization of the firm and providing incentives for the creditors to monitor the firm. We show that the definition of creditors' ownership rights over the company and the protection of the creditors' seniority, are crucial to asses the ex-ante efficiency of a bankruptcy procedure.
AB - This paper suggests a framework to analyze the efficiency properties of bankruptcy procedures, distinguishing between ex-ante and ex-post efficiency. Ex-post efficiency consists in maximizing the ex-post value of the insolvent firm, whereas ex-ante efficiency consists in maximizing the proceeds to creditors from the reorganization of the firm and providing incentives for the creditors to monitor the firm. We show that the definition of creditors' ownership rights over the company and the protection of the creditors' seniority, are crucial to asses the ex-ante efficiency of a bankruptcy procedure.
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U2 - 10.1016/S0014-2921(97)00009-3
DO - 10.1016/S0014-2921(97)00009-3
M3 - Article
AN - SCOPUS:0000033114
SN - 0014-2921
VL - 41
SP - 475
EP - 485
JO - European Economic Review
JF - European Economic Review
IS - 3-5
ER -