Survival Rates in Bankruptcy Systems: Overlooking the Evidence

Author: Couwenberg O.

Source: European Journal of Law and Economics, Volume 12, Number 3, November 2001 , pp. 253-273(21)

Publisher: Springer

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Abstract:

Extensive research on bankruptcy still has not made it possible to end the efficiency discussion concerning the need for a reorganization provision in bankruptcy laws. In this paper, I discuss the pervasiveness of asset sales in bankruptcy procedures and the effect it has on survival rates. Without these figures on going concern asset sales Western countries show astonishingly low firm survival rates. In addition, it becomes clear that the bankruptcy system in the US may be under-researched to such an extent that it seriously confounds our view of bankruptcy resolution.

Keywords: bankruptcy; survival rate; asset sales; liquidation; reorganization

Language: English

Document Type: Regular paper

Affiliations: 1: Department of Finance and Accounting, Faculty of Economics, University of Groningen, PO Box 800, 9700 AV Groningen, The Netherlands o.couwenberg@eco.rug.nl

Publication date: 2001-11-01