S Abraham Ravid, S. Sundgren
ABSTRACT
We use a sample of small firms to compare efficiency aspects of the
creditor oriented old (pre-1993) Finnish bankruptcy code and the debtor
oriented US code. We find that although the same economic factors affect
liquidations in both the US and Finland, under the Finnish code firms are
somewhat more likely to be liquidated piecemeal. We also find that the
costs of going concern sales and of liquidations under the Finnish code
tend to go toward the higher end of the range found in US studies; and
that payments to creditors in the US reorganizations are higher than the
payoffs under the Finnish bankruptcy regime.
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