Publication Type

Journal Article

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

Publisher

Virtus Interpress

Additional URL

http://www.virtusinterpress.org/additional_files/journ_coc/full-text-papers-open-access/Paper019.pdf

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