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Bankruptcy Section 363 Sales: Choices and Consequences

Author

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  • Dror Parnes

    (Finance Department, College of Business, University of South Florida, BSN 3127, 4202 E. Fowler Ave., Tampa, FL 33620 – 5500, USA)

Abstract

We contrast bankruptcy Section 363 Sales with the traditional path of Chapter 11 reorganization and find that among financial institutions, higher measures of creditors' coordination problems favor the Chapter 11 path, while greater profitability, available cash, asymmetric information between shareholders and creditors, and potential growth rate support the choice of 363 Sales. Among the non-financial firms, higher measures of creditors' coordination problem and available cash favor the course of Chapter 11, while greater profitability, liquidity, and asymmetric information support the path of 363 Sales. We further detect that bankruptcy Section 363 Sales exhibits lower direct fees, and it lasts significantly less time than formal Chapter 11 before the final emergence.

Suggested Citation

  • Dror Parnes, 2012. "Bankruptcy Section 363 Sales: Choices and Consequences," Quarterly Journal of Finance (QJF), World Scientific Publishing Co. Pte. Ltd., vol. 2(04), pages 1-24.
    • Handle: RePEc:wsi:qjfxxx:v:02:y:2012:i:04:n:s2010139212500164
    DOI: 10.1142/S2010139212500164
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    References listed on IDEAS

    as
    1. Ralph BRUBAKER & Charles Jordan TABB, 2010. "BANKRUPTCY REORGANIZATIONS AND THE TROUBLING LEGACY OF CHRYSLER AND GM (English version)," Jurnalul de Studii Juridice, Editura Lumen, Department of Economics on Behalf of Petre Andrei University Iasi, vol. 3, pages 13-51, December.
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      More about this item

      Keywords

      Bankruptcy; Section 363 Sales; Chapter 11 reorganization; G33; G34;
      All these keywords.

      JEL classification:

      • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
      • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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