On the design of efficient priority rules for secured creditors: empirical evidence from a change in law
2004 (English)In: European Journal of Law and Economics, ISSN 0929-1261, E-ISSN 1572-9990, Vol. 18, no 3, 273-297 p.Article in journal (Refereed) Published
This article assesses the effect of a reduction in secured creditor priority on distributions and administrative costs in liquidating bankruptcy cases by reporting the first empirical study of the effect of a priority change. Priority reform had redistributive effects in liquidating bankruptcy. As expected, average payments to general unsecured creditors were significantly higher after the reform than before the reform and payments to secured creditors decreased. Reform did not increase the size of the pie to be distributed in bankruptcy. Nor did it increase the direct costs of bankruptcy.
Place, publisher, year, edition, pages
Springer , 2004. Vol. 18, no 3, 273-297 p.
bankruptcy law, secured creditors, priority rules
IdentifiersURN: urn:nbn:se:umu:diva-5787DOI: 10.1023/B:EJLE.0000049198.54001.58OAI: oai:DiVA.org:umu-5787DiVA: diva2:145455