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Full-Text Articles in Law
A Simple Theory Of Complex Valuation, Julia Simon-Kerr, Anthony Casey
A Simple Theory Of Complex Valuation, Julia Simon-Kerr, Anthony Casey
Julia Simon-Kerr
Complex valuations of assets, companies, government programs, damages, and the like cannot be done without expertise, yet judges routinely pick an arbitrary value that falls somewhere between the extreme numbers suggested by competing experts. This creates costly uncertainty and undermines the legitimacy of the court. Proposals to remedy this well-‐‑recognized difficulty have become increasingly convoluted. As a result, no solution has been effectively adopted and the problem persists. This article suggests that the valuation dilemma stems from a misconception of the inquiry involved. Courts have treated valuation as its own special type of inquiry distinct from traditional fact finding. We …
Bankruptcy Decision Making: An Empirical Study Of Continuation, Edward R. Morrison
Bankruptcy Decision Making: An Empirical Study Of Continuation, Edward R. Morrison
Faculty Scholarship
Many small businesses attempt to reorganize under Chapter 11 of the U.S. Bankruptcy Code, but most are ultimately liquidated instead. Little is known about this shutdown decision. It is widely suspected that the bankruptcy process exhibits a continuation bias, allowing failing businesses to linger under the protection of the court, which resists liquidation even when it is optimal. This paper examines the shutdown decision in a sample of Chapter 11 bankruptcy cases filed in a typical bankruptcy court over the course of a year. The presence of continuation bias is tested along several dimensions – the extent of managerial control …