Percorrer por autor "Pampel, Kathrin Jutta"
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- What factors influence the success of a Chapter 11 filing?Publication . Pampel, Kathrin Jutta; Moussu, ChristopheIt is vital for a modern economy to have an efficient bankruptcy procedure in place to ensure stability and resilience. In the U.S., Chapter 11 offers firms a legal framework for reorganization. However, outcomes vary from case to case. While some companies emerge successfully others are forced to liquidate or refile shortly after emergence. This leads to the question: What factors influence the success of a Chapter 11 filing? To answer this question, I analysed a dataset of large public U.S. bankruptcy filings between 1980 to 2021. I created three binary success measures to capture different dimensions of success: 'Emergence From Chapter 11', 'No Refiling Within 5 Years' and 'EBITDA Sign Change'. For my independent predictors I used a broad set of variables capturing financial health, industry conditions, procedural characteristics and governance and legal features. The analysis revealed that success is not a uniform concept. The use of DIP financing, CEO replacement and filing in Delaware or New York increases the likelihood of emergence, while free-fall cases and cases that include asset sales are less likely to emerge. Moreover, larger companies and those that file as a free-fall are less likely to refile within 5 years. Filing in Delaware or New York on the other hand, increases the probability of refiling. Finally, industry distress at emergence lowers the probability of a company to turn a negative EBITDA positive, while cases with a creditor’s committee in place are much more likely to turn a negative EBITDA positive.