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Impact anticipé de la réforme à la loi sur la faillite

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  • Martel, Jocelyn

    (THEMA, Université de Cergy-Pontoise)

Abstract

The main objective of the new Bankruptcy Act is to promote the use of financial reorganization. Data from a sample of 393 financial reorganizations in Canada are used to determine whether or not this represents an improvement over the previous System and whether or not the objective to increase the proportion of reorganizations will be met. Results from the statistical and logit analyses suggest that (i) the new voting requirement should increase the number of accepted proposals by 1.5 percentage points, (ii) the change in Crown priority should raise the success and acceptance rate by 2.02 and 0.55 percentage points respectively and (iii) the changes relating to stay of proceedings are expected to raise the use of holding proposals and thus reduce the likelihood of acceptance of a proposal by unsecured creditors. Finally, in its efforts to promote reorganization, the new bankruptcy regime is expected to attract firms in the tail of the distribution of financially distressed firms. This will worsen the screening properties of the bankruptcy system and make it more costly for the Canadian economy. L’objectif principal de la réforme à la Loi sur la faillite réside dans l’utlisation accrue de la procédure de réorganisation financière au détriment de la procédure de faillite. La présente étude a pour but d’évaluer l’impact potentiel de cette réforme sur la base d’une banque de données originale comprenant 393 entreprises canadiennes en réorganisation financière. Les résultats de l’analyse empirique nous mènent aux conclusions suivantes : (i) l’assouplissement de la règle de vote devrait entraîner une augmentation du nombre de propositions acceptées de l’ordre de 1.5 points de pourcentage, (ii) la modification de la priorité accordée à une partie des créances gouvernementales devrait accroître le taux de succès et d’acceptation des propositions de l’ordre de 2.02 et 0.55 points de pourcentage respectivement, et (iii) les modifications apportées au gel des procédures pourraient entraîner une augmentation de l’utilisation de propositions provisoires ce qui résulterait dans une diminution de la probabilité d’acceptation par les créanciers non garantis. Finalement, la récente réforme à la Loi sur la faillite possède tout le potentiel d’attirer en réorganisation des entreprises dans la partie gauche de la queue de la distribution des entreprises en difficultés financières. Ceci devrait réduire l’efficacité du système de faillite canadien et imposer des coûts additionnels à notre économie.

Suggested Citation

  • Martel, Jocelyn, 1996. "Impact anticipé de la réforme à la loi sur la faillite," L'Actualité Economique, Société Canadienne de Science Economique, vol. 72(4), pages 417-432, décembre.
    • Handle: RePEc:ris:actuec:v:72:y:1996:i:4:p:417-432
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    1. Fisher, Timothy C G & Martel, Jocelyn, 1995. "The Creditors' Financial Reorganization Decision: New Evidence from Canadian Data," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 11(1), pages 112-126, April.
    2. Gunderson, Morley & Kervin, John & Reid, Frank, 1986. "Logit Estimates of Strike Incidence from Canadian Contract Data," Journal of Labor Economics, University of Chicago Press, vol. 4(2), pages 257-276, April.
    3. Philippe Aghion & Patrick Bolton, 1992. "An Incomplete Contracts Approach to Financial Contracting," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 59(3), pages 473-494.
    4. Jocelyn Martel, 1991. "Bankruptcy Law and the Canadian Experience: An Economic Appraisal," Canadian Public Policy, University of Toronto Press, vol. 17(1), pages 52-63, March.
    5. Jocelyn Martel, 1994. "Commercial Bankruptcy and Financial Reorganization in Canada," CIRANO Papers 94c-02, CIRANO.
    6. Timothy C. G. Fisher & Jocelyn Martel, 1994. "Will the Bankruptcy Reform Work? An Empirical Analysis of Financial Reorganization in Canada," Canadian Public Policy, University of Toronto Press, vol. 20(3), pages 265-277, September.
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    1. T. C. G. Fisher & J. Martel, 2001. "A Comparison of Business Bankruptcies across Industries in Canada, 1981-2000," THEMA Working Papers 2001-03, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    2. Timothy C. G. Fisher & Jocelyn Martel, 2003. "The Effect of Bankruptcy Reform on the Number of Corporate Reorganization Proposals," Canadian Public Policy, University of Toronto Press, vol. 29(3), pages 339-349, September.

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