Debtor-in-possession financing and bankruptcy resolution: Empirical evidence

• 成果类型: Article; Proceedings Paper
• 署名作者: Dahiya, S; John, K; Puri, M; Ramírez, G
• 署名单位: New York University; Georgetown University; Stanford University; National Bureau of Economic Research; University System of Georgia; Kennesaw State University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/S0304-405X(03)00113-2
• 发表日期: 2003
• 页码: 259-280
• 关键词: Chapter 11; bankruptcy; debtor-in-possession financing

摘要

Debtor-in-possession (DIP) financing is unique secured financing available to firms filing for Chapter 11. Opponents of DIP financing argue that it leads to overinvestment. Alternatively, DIP financing can allow funding for positive net present value projects that increase the likelihood of reorganization and reduce time in bankruptcy. Using a large sample of bankruptcy filings, we find little evidence of systematic overinvestment. DIP financed firms are more likely to emerge from Chapter 11 than non-DIP financed firms. DIP financed firms have a shorter reorganization period; they are quicker to emerge and also quicker to liquidate. The reorganization period is even shorter when prior lenders provide the DIP financing. (C) 2003 Elsevier Science B.V. All rights reserved.