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Bankruptcy reform: evidence from a survey among judges and receivers

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  • Nico Dewaelheyns
  • Cynthia Van Hulle

Abstract

Because of low success rates, several European countries have recently reformed their US Chapter 11-type bankruptcy procedures or are planning future reforms. Using unique data from a survey among judges and insolvency practitioners (receivers), we explore the ex ante expectations of the impact of the 2009 adjustments to the Belgian reorganization procedure, including cost reductions, improvement of the procedure's reputation, encouraging informal reorganizations and appointing a mediator. The general assessment is moderately positive, although judges are significantly more optimistic than receivers. In addition, we find that the respondents' expectations are related to their views on the current system, perceived causes of failure and regional characteristics. We conclude by formulating policy recommendations.

Suggested Citation

  • Nico Dewaelheyns & Cynthia Van Hulle, 2010. "Bankruptcy reform: evidence from a survey among judges and receivers," Applied Economics Letters, Taylor & Francis Journals, vol. 17(14), pages 1367-1371.
    • Handle: RePEc:taf:apeclt:v:17:y:2010:i:14:p:1367-1371
    DOI: 10.1080/13504850902967498
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    References listed on IDEAS

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    1. Berkovitch, Elazar & Israel, Ronen, 1999. "Optimal Bankruptcy Laws across Different Economic Systems," The Review of Financial Studies, Society for Financial Studies, vol. 12(2), pages 347-377.
    2. Novak, Branko & Sajter, Domagoj, 2007. "Causes Of Bankruptcy In Europe And Croatia," MPRA Paper 5833, University Library of Munich, Germany, revised 01 Sep 2007.
    3. Edward R. Morrison, 2007. "Bankruptcy Decision Making: An Empirical Study of Continuation Bias in Small-Business Bankruptcies," Journal of Law and Economics, University of Chicago Press, vol. 50(2), pages 381-419.
    4. Stewart Thornhill & Raphael Amit, 2003. "Learning About Failure: Bankruptcy, Firm Age, and the Resource-Based View," Organization Science, INFORMS, vol. 14(5), pages 497-509, October.
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    6. Branch, Ben, 2002. "The costs of bankruptcy: A review," International Review of Financial Analysis, Elsevier, vol. 11(1), pages 39-57.
    7. Nico Dewaelheyns & Cynthia Hulle, 2008. "Legal reform and aggregate small and micro business bankruptcy rates: evidence from the 1997 Belgian bankruptcy code," Small Business Economics, Springer, vol. 31(4), pages 409-424, December.
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    Cited by:

    1. Rachid Achbah, 2024. "Manager Characteristics and SMEs' Restructuring Decisions: In-Court vs. Out-of-Court Restructuring," Papers 2402.18135, arXiv.org.
    2. Leyman, Bart & Schoors, Koen J.L. & Coussement, Peter, 2011. "Does court-supervised reorganization work? Evidence from post-confirmation firm failure," International Review of Law and Economics, Elsevier, vol. 31(3), pages 149-168, September.
    3. Rachid Achbah, 2023. "Manager Characteristics and SMEs’ Restructuring Decisions: In-Court vs. Out-of-Court Restructuring," Post-Print hal-04279942, HAL.
    4. Aysun Uluc, 2011. "An Alternative Method for Measuring Financial Frictions," The B.E. Journal of Macroeconomics, De Gruyter, vol. 11(1), pages 1-31, April.
    5. Bart Leyman, 2012. "The uneasy case for rehabilitating small firms under the 1997-reorganization law in Belgium: evidence from reorganization plans," European Journal of Law and Economics, Springer, vol. 34(3), pages 533-560, December.
    6. World Bank & International Finance Corporation, "undated". "Doing Business in the East African Community 2011," World Bank Publications - Reports 27390, The World Bank Group.

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