Publication Type
Journal Article
Version
publishedVersion
Publication Date
1-2008
Abstract
Studies on the announcement effects of bankruptcy filings have found that when a firm files for Chapter 11 bankruptcy protection its shareholders suffer significant losses. A recent paper extends these findings by investigating the announcement effect on rival companies, while another examines the equity performance of firms emerging from bankruptcy. We combine these two lines of inquiry by examining the effect on rivals when a firm emerges from the protection of Chapter 11. We find both significant negative stock market returns and significant negative revisions in analysts’ earnings forecasts for rivals of successfully reorganized companies.
Keywords
bankruptcy, stockmarket, firms
Discipline
Finance and Financial Management | Portfolio and Security Analysis
Research Areas
Finance
Publication
Corporate Ownership and Control
Volume
6
Issue
2
First Page
304
Last Page
311
ISSN
1727-9232
Identifier
10.22495/cocv6i2c2p5
Publisher
Virtus Interpress
Citation
CATON, Gary L.; DONALDSON, Jeffrey; and GOH, Jeremy.
The Effect of Rivals When Firms Emerge from Bankruptcy. (2008). Corporate Ownership and Control. 6, (2), 304-311.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/1775
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.22495/cocv6i2c2p5