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Bargaining Over Equity's Share In The Bankruptcy Reorganization Of Large, Publicly Held Companies, Lynn M. Lopucki

UF Law Faculty Publications

This Article reports some of the results of an empirical study of the bankruptcy reorganization of large, publicly held companies. We present data relevant to what many consider to be the central issue of reorganization theory-how the value of the reorganizing enterprise should be divided among the various claims and interests. We demonstrate that there is indeed systematic deviation from the absolute priority rule in favor of junior interests; but, with respect to large, publicly held corporations, the debate about how to prevent these deviations is, for the most part, a tempest in a teapot-the difference between absolute priority and …