Automatic bankruptcy auctions and fire-sales

• 成果类型: Article
• 署名作者: Eckbo, B. Espen; Thorburn, Karin S.
• 署名单位: Dartmouth College
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2007.10.003
• 发表日期: 2008
• 页码: 404-422
• 关键词: bankruptcy; auction; Going-concern sale; Piecemeal liquidation; Fire-sale

摘要

We test for fire-sale tendencies in automatic bankruptcy auctions. We find evidence consistent with fire-sale discounts when the auction leads to piecemeal liquidation, but not when the bankrupt firm is acquired as a going concern. Neither industry-wide distress nor the industry affiliation of the buyer affect prices in going-concern sales. Bids are often structured as leveraged buyouts, which relaxes liquidity constraints and reduces bidder underinvestment incentives in the presence of debt overhang. Prices ill prepack auctions (sales agreements negotiated prior to bankruptcy filing) are on average lower than for in-auction going-concern sales, suggesting that prepacks may help preempt excessive liquidation when the auction is expected to be illiquid. Prepack targets have a greater industry-adjusted probability of refiling for bankruptcy, indicating that liquidation preemption is a risky strategy. (C) 2008 Elsevier B.V. All rights reserved.