| Popis: |
A generally accepted view is that sophisticated bankruptcy procedures are required to mitigate coordination failures and fire sale discounts arising from financial distress. In this paper, we provide empirical evidence addressing this issue using the shipping industry, where the resolution of distress is largely distanced from sovereign bankruptcy procedures. We find that signifinant institutional and contractual innovations have strengthened the rights of creditors thereby reducing the direct cost of financial distress, for example by lowering coordination failures and reducing fire sale discounts. However, those innovations may have come at a cost to other stakeholders, including crew, port authorities, and the environment, leading to oil spills and the abandonment of under-maintained low valued ships. |
