Do self-serving managers choose Chapter 11 filing over out-of-court restructuring?

Research output: Contribution to journalArticle

1 Scopus citations

Abstract

I investigate whether self-serving managers in financially distressed firms influence a firm's decision on the choice of debt restructuring method. 1 show that there is a non-linear relationship between managerial ownership and the probability of Chapter 11 filing. I find that distressed firms are more likely to choose Chapter 11 with the increase of managerial ownership when managerial ownership is in the 5% - 25% range. I also find a significant curvilinear relation between managerial ownership and the probability of Chapter 11. My results are consistent with the hypothesis that managerial ownership plays a significant role in corporate decisions.

Original languageEnglish
Pages (from-to)105-114
Number of pages10
JournalJournal of Economics and Finance
Volume30
Issue number1
DOIs
Publication statusPublished - 1 Jan 2006

    Fingerprint

Cite this