Ex post Efficiency of Bankruptcy Procedures : A General Normative Framework - HAL-SHS - Sciences de l'Homme et de la Société Accéder directement au contenu
Article Dans Une Revue International Review of Law and Economics Année : 2004

Ex post Efficiency of Bankruptcy Procedures : A General Normative Framework

Résumé

In this paper, we consider the case of a distressed firm whose financial commitments have to be renegotiated with stakeholders (banks, trade creditors …). At default time, rival projects (continuation, piecemeal liquidation, liquidation as a going concern …) may be undertaken. In such a case, the most frequent way of making collective choices is to vote. Our attention focuses on the risk of not choosing the best project because of free riders: personal interests may block the issue in favor of the project associated to the highest value of the firm. At first, we consider a law-enforced procedure under which financial deviations from the absolute priority order (APO) are possible: each individual gain is slightly modified in order to obtain a non-strict majority in favor of the best project. This legal intervention can be implemented and considered as “optimal” if it respects four criteria: economic efficiency, financial neutrality, legal tolerability and democratic desirability. Under these conditions, any law-driven renegotiation process must defines financial transfers that underweight (respectively overweight) the sub-optimal gains (respectively losses) of the most influent voter. Moreover, the proportion of financial transfers granted to each stakeholder exactly reflects their relative influence power: in other words, financial deviations from APO can be interpreted as the price that any stakeholder has to pay (respectively receive) because of his marginal negative (respectively positive) impact on the collective decision. Then, these results serve as a guide to comment ex post efficiency of various bankruptcy procedures (US, French, English and German). Our approach may be interpreted as a first step in the design of an economically efficient procedure that should deal with both ex ante and ex post efficiencies.

Dates et versions

hal-00279018 , version 1 (14-05-2008)

Licence

Paternité

Identifiants

Citer

Régis Blazy, Bertrand Chopard. Ex post Efficiency of Bankruptcy Procedures : A General Normative Framework. International Review of Law and Economics, 2004, 24 (4), pp.447-471. ⟨10.1016/j.irle.2005.01.004⟩. ⟨hal-00279018⟩
49 Consultations
0 Téléchargements

Altmetric

Partager

Gmail Facebook X LinkedIn More