Chapter 11: Duration, outcome, and post-reorganization performance

Diane K. Denis, Kimberly J. Rodgers

Research output: Contribution to journalArticle

46 Citations (Scopus)

Abstract

We find that among firms that file Chapter 11 those that are smaller have better operating performance, and are in higher operating margin industries spend less time in Chapter 11. Firms are more likely to emerge as going concerns and to achieve positive post-reorganization profitability if they significantly reduce assets and liabilities while in Chapter 11. Higher pre-bankruptcy industry-adjusted operating margins and improvements in margin are associated with post-reorganization profitability but do not impact the decision to reorganize. These results reveal characteristics and actions associated with successful reorganizations and, furthermore, suggest that Chapter 11 allows promising firms to successfully reorganize. COPYRIGHT 2007, SCHOOL OF BUSINESS ADMINISTRATION.

Original languageEnglish (US)
Pages (from-to)101-118
Number of pages18
JournalJournal of Financial and Quantitative Analysis
Volume42
Issue number1
StatePublished - Mar 1 2007

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Chapter 11
Reorganization
Margin
Profitability
Industry
Assets
Liability
Operating performance
Bankruptcy
Going concern
Business Administration

All Science Journal Classification (ASJC) codes

  • Accounting
  • Finance
  • Economics and Econometrics

Cite this

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Chapter 11 : Duration, outcome, and post-reorganization performance. / Denis, Diane K.; Rodgers, Kimberly J.

In: Journal of Financial and Quantitative Analysis, Vol. 42, No. 1, 01.03.2007, p. 101-118.

Research output: Contribution to journalArticle

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