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- Title
Anatomy of financial distress: An examination of junk-bond issuers.
- Authors
Asquith, Paul; Gertner, Robert
- Abstract
This paper analyses the ways in which financially distressed firms try to avoid bankruptcy through public and private debt restructurings, asset sales, mergers, and capital expenditure reductions Our main finding is that a firm's debt structure affects the way financially distressed firms restructure The combination of secured private debt and numerous public debt issues seems to impede out-of-court restructurings and increases the probability of Chapter 11 filing In addition, we find that, while asset sales are a way of avoiding Chapter 11, they are limited by industry factors firms in distressed and highly leveraged industries are less prone to sell assets
- Subjects
UNITED States; BANKRUPTCY; CORPORATE finance; CORPORATE finance management; CORPORATE debt; JUNK bonds; PUBLIC debts; FACTORS of production; PRODUCTION (Economic theory)
- Publication
Quarterly Journal of Economics, 1994, Vol 109, Issue 3, p625
- ISSN
0033-5533
- Publication type
Article
- DOI
10.2307/2118416