CAUSES OF FINANCIAL DISTRESS FOLLOWING LEVERAGED RECAPITALIZATIONS

• 成果类型: Article
• 署名作者: DENIS, DJ; DENIS, DK
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/0304-405X(94)00792-Y
• 发表日期: 1995
• 页码: 129-157
• 关键词: Financial distress; RECAPITALIZATIONS; leverage

摘要

We report that 31% of the firms completing leveraged recapitalizations between 1985 and 1988 subsequently encounter financial distress. Following their recaps, the distressed firms exhibit (1) poor operating performance due largely to industry-wide problems, (2) surprisingly low proceeds from asset sales, and (3) negative stock price reactions to economic and regulatory events associated with the demise of the market for highly-leveraged transactions. The incidence of distress is not related to several characteristics that have previously been linked with poorly-structured deals. We thus attribute the high rate of distress primarily to unexpected macroeconomic and regulatory developments.