Bankruptcy Decision Research Articles

The discovery of experts' decision rules from qualitative bankruptcy data using genetic algorithms

Abstract Numerous studies on bankruptcy prediction have widely applied data mining techniques to finding out the useful knowledge automatically from financial databases, while few studies have proposed qualitative data mining approaches capable of eliciting and representing experts' problem-solving knowledge from experts' qualitative decisions. In an actual risk assessment process, the discovery of bankruptcy prediction knowledge from experts is still regarded as an important task because experts' predictions depend on their subjectivity. This paper proposes a genetic algorithm-based data mining method for discovering bankruptcy decision rules from experts' qualitative decisions. The results of the experiment show that the genetic algorithm generates the rules which have the higher accuracy and larger coverage than inductive learning methods and neural networks. They also indicate that considerable agreement is achieved between the GA method and experts' problem-solving knowledge. This means that the proposed method is a suitable tool for eliciting and representing experts' decision rules and thus it provides effective decision supports for solving bankruptcy prediction problems.

The Household Bankruptcy Decision

Personal bankruptcy filings have risen from 0.3 percent of households per year in 1984 to around 1.35 percent in 1998 and 1999, transforming bankruptcy from a rare occurrence to a routine event. Lenders lost about $39 billion in 1998 due to personal bankruptcy filings. But economists have little understanding of why households file for bankruptcy or why filings have increased so rapidly. Until very recently, studying the household bankruptcy decision was very difficult, because no household-level data set existed that included information on bankruptcy filings. In this paper, we use new data from the Panel Study of Income Dynamics, which includes information on bankruptcy filings, to estimate a model of households’ bankruptcy decisions. We find support for the strategic model of bankruptcy, which predicts that households are more likely to file when their financial benefit from filing is higher. Our model predicts that an increase of $1,000 in households’ financial benefit from bankruptcy would result in a 7-percent increase in the number of bankruptcy filings. Our model also predicts that if the 1997 National Bankruptcy Review Commission’s proposed changes in bankruptcy exemption levels were implemented, there would be a 16-percent increase in the number of bankruptcy filings each year. But if the $100,000 cap on homestead exemptions recently passed by the U.S. Senate were adopted, our model predicts that there would be only a negligible effect on the number of filings. We find little support for the nonstrategic model of bankruptcy which predicts that households file when adverse events occur which reduce their ability to repay. Finally, controlling for state and time fixed effects, our model shows that households are more likely to file for bankruptcy if they live in districts with higher aggregate filing rates.

Bankruptcy Decision Making

When a firm encounters financial distress, there is a significant possibility that, at some point, the firm itself should be shut down and its assets put to better use. But Chapter 11 and indeed all market-mimicking reorganization regimes other than a speedy auction entrust the shutdown decision to a bankruptcy judge who lacks information and expertise, as well as the ability to control the timing of her decisions. Understanding the costs of entrusting the shutdown decision to a bankruptcy judge is central to assessing any law of corporate reorganizations. This article models the shutdown decision as the exercise of a real option. The model suggests that the shutdown decision may loom so large in the early parts of the bankruptcy case that it erases any significant difference between Chapter 11 and many alternative market-mimicking regimes. All these regimes take more time than mandatory auctions and thus increase the cost of taking the shutdown decision away from a market actor. Moreover, the real option itself gives parties an incentive to withhold information. Only a system of mandatory auctions both limits the amount of time the shutdown option resides with an inexpert decision maker and forces insiders to give that decision maker sufficient information to value the option

Bankruptcy Law as Social Legislation

Bankruptcy law is generally thought of as being purely economic in nature. But personal bankruptcy is also a form of post-contractual opportunism that reflects a moral decision to allow an individual to repudiate a promise of repayment. Thus, the bankruptcy decision is fraught with moral significance regarding promise-keeping and reciprocity. Reciprocity, it is argued, is the cornerstone of a free economy, healthy civil society, and democratic governance. Rampant personal bankruptcy, it is argued, frays these bonds of reciprocity that are necessary for a free, responsible, and self-governing society.

On Direct Bankruptcy Costs and the Firm's Bankruptcy Decision

Using firm-level information on 622 commercial bankruptcies filed under Canadian law (324 liquidating firms and 298 reorganizing firms) and controlling for a variety of firm-specific factors, we find there is no difference in direct bankruptcy costs between liquidation and reorganization. We argue that if bankruptcy costs do have an impact on a firm's bankruptcy decision, it can only be through differences in indirect bankruptcy costs.

The Bankruptcy Decision: Empirical Evidence from Canada

While the bankruptcy framework introduced in the seminal work of Bulow and Shoven and extended by White has been the foundation for theoretical work in the area for the last 20 years, it has never been empirically tested. The aim of the paper is to examine empirically the Bulow-Shoven-White framework using micro data on 810 bankrupt firms in Canada. Results are generally supportive of the Bulow-Shoven-White framework: the probability of reorganization increases with the level of free assets and the amount of debt reduction while it decreases with the level of unsecured debt. Results also show that the Bulow-Shoven-White framework does not provide a complete picture of the firm's bankruptcy decision. In particular, the relative size of government claims, the legal form of the firm, and the asset/debt ratio are also significant determinants of the bankruptcy decision.

Determinants of the Consumer Bankruptcy Decision

Qualitative choice models of consumers' decisions to file for bankruptcy and their choice of bankruptcy chapter are estimated jointly, combining choice‐based sampling techniques with a nested estimation procedure. Medical and credit card debt are found to be the strongest contributors to bankruptcy, with homeownership playing an important role with respect to both the decision to declare bankruptcy and the choice of bankruptcy alternative. The potential effects of legal changes relating to property exemptions and dischargeable debt categories are found to encourage debt repayment through Chapter 13.

The Bankruptcy Decision and Debt Contract Renegotiations *

We consider the bankruptcy law and workout practices in the United States and model bankruptcy as a strategic decision. We analyze a firm's choice between liquidation under Chapter 7, renegotiation of the debt contract in a workout, and reorganization under Chapter 11 of the bank- ruptcy code. Our premise is that a financially distressed firm chooses its action in order to minimize the loss in value caused by the well-known over- and under-investment problems. We show that the firm initiates a workout when it faces under-investment, and commences Chapter 11 when it faces over-investment. Some of the results are: (i) in default, total firm value and equity value increase upon the announcement of a workout and decrease upon the announcement of Chapter 11; (ii) firms with shorter maturity of debt are more likely to reorganize in a workout; (iii) among the firms that renegotiate their debt contract, the proportion of firms entering Chapter 11 is higher for firms in mature industries than for firms in growth industries. Financial distress may cause traumatic events like default, bankruptcy, liquidation or reorganization, whose resolution has a great impact on a firm's financial and economic policies. Several actions are available to firms to alleviate the costs of these events, among which are commencing Chapter 11 or Chapter 7 of the bank- ruptcy code, out-of-court workout negotiations to change the debt contract, and open-market liquidation. In order to better understand the behavior of financially distressed firms, their choices over this entire set of actions must be considered. In this paper, we explore the determinants of the bankruptcy decision in the presence of the other options to resolve the conflict between debtors and creditors. Several puzzling issues arise when bankruptcy is viewed as a strategic decision. First, why do firms commence Chapter 11 instead of directly negotiating with

The Bankruptcy Decision: Does Stigma Matter?

In this paper, we model and estimate the effects of both bankruptcy stigma and financial benefit on households' decisions to file for bankruptcy. We show that the probability of debtors filing for bankruptcy rises when the level of bankruptcy stigma falls. We also show that the level of bankruptcy stigma has external effects, so that individual households are better off if their own bankruptcy stigma level is lower than that of others in the same credit pool and are worse off if their own bankruptcy stigma level is higher than that of others in the same credit pool. Using new data, we find that the probability of filing for bankruptcy is positively and significantly related to the financial benefit from filing. If households' financial benefit from bankruptcy rose by $1,000, the model predicts that the number of filings would rise by 2.8%. As an inverse proxy for the level of bankruptcy stigma, we use the aggregate filing rate in households' state of residence over the past three years, corrected for state fixed effects. We find that this measure is positively and significantly related to the probability of filing for bankruptcy. According to the model, if the bankruptcy filing rate in a particular state doubled, the reduction in the level of bankruptcy stigma would cause the state's filing rate to increase by an additional 19% in the following year. Finally, our model predicts that if the 1997 National Bankruptcy Review Commission's proposed increases in bankruptcy exemption levels were implemented, then the number of bankruptcy filings would increase by about 89,000 per year.

Lessons from the Orange County Bankruptcy

On December 6, 1994, Orange County became the largest municipality ever to file for bankruptcy. This dramatic action was prompted by a loss of $1.64 billion on the Orange County Investment Pool that became realized as the pool was liquidated. This study provides an update to the Orange County situation and discusses whether the bankruptcy and liquidation were necessary. The bankruptcy decision seems to be justified by the fact that the county was facing liabilities far in excess of its assets. Indeed, the bankruptcy court has ruled that the county's petition was entirely appropriate as it was insolvent at the time of the filing. The liquidation decision, however, involved a substantial opportunity loss, as the subsequent drop in interest rates would have led to a recovery of the portfolio. Whether liquidation was appropriate cannot be judged by the path of interest rates after the fact. The article illustrates how the value at risk methodology could have been used to estimate the risks of the portfolio prior to the facts. By December 1994, there was an estimated 5% probability that the portfolio would suffer a further loss of $1.1 billion or more over the following year.

Lessons from the Orange County Bankruptcy

On December 6, 1994, Orange County became the largest municipality ever to file for bankruptcy. This dramatic action was prompted by a loss of $1.64 billion on the Orange County Investment Pool that became realized as the pool was liquidated. This study provides an update to the Orange County situation and discusses whether the bankruptcy and liquidation were necessary. The bankruptcy decision seems to be justified by the fact that the county was facing liabilities far in excess of its assets. Indeed, the bankruptcy court has ruled that the county's petition was entirely appropriate as it was insolvent at the time of the filing. The liquidation decision, however, involved a substantial opportunity loss, as the subsequent drop in interest rates would have led to a recovery of the portfolio. Whether liquidation was appropriate cannot be judged by the path of interest rates after the fact. The article illustrates how the value at risk methodology could have been used to estimate the risks of the portfolio prior to the facts. By December 1994, there was an estimated 5% probability that the portfolio would suffer a further loss of $1.1 billion or more over the following year.

Determinants of the Consumer Bankruptcy Decision

A financial portrait of households declaring bankruptcy under both Chapters 7 and 13 of the Bankruptcy Code is developed, and compared to the general population. Qualitative choice models of the decision to file for bankruptcy and chapter selection are estimated jointly, combining choice-based sampling techniques with a nested estimation procedure. Medical and credit card debt are found to be the strongest contributors to bankruptcy, with homeownership playing an important role with respect to both and the choice of bankruptcy alternative. The potential effects of legal changes relating to property exemptions and dischargeable debt categories are found to encourage debt repayment through Chapter 13.

On bankruptcy information systems

Bankruptcy prediction information systems provide a noisy signal. Thus, these information systems are not perfectly reliable. This paper investigates a means for including the reliability of the signal into a basic bankruptcy prediction model. Then the implications of integrating reliability into the model are explored. The results indicate that the model is highly sensitive to reliability. As a result, the bankruptcy decision models should include information system reliability or else decision outcomes can be suboptimal (for example, loans made when they should not be or not made when they should be). The results also indicate that some heuristics that may be used by decision makers to account for reliability are likely to lead to quite misleading results.

The Corporate Bankruptcy Decision

Economic theory suggests that bankruptcy should serve as a screening process designed to eliminate only those firms that are economically inefficient and whose resources could be better used in some other activity. However, firms typically file for bankruptcy voluntarily. When they do, creditors are not all repaid in full and large redistributional effects occur. Managers of firms do not take creditors' losses fully into account in deciding either how to run the firm or whether and when to file for bankruptcy. This suggests that firms in bankruptcy might not always be economically inefficient and that inefficient firms might not always end up in bankruptcy. The paper is divided into separate sections on bankruptcy liquidation and reorganization. In examining each of those topics, it will consider the features of an economically efficient bankruptcy procedure and how such a procedure might differ from actual U.S. bankruptcy law. In a concluding section, I consider the costs of bankruptcy and some proposed reforms. I argue that some deadweight losses are the unavoidable consequence of having a bankruptcy procedure and cannot be eliminated by reforming it. These deadweight losses are the price of having limited liability for corporate equity holders.

Some Effects of the Bankruptcy Reform Act of 1978

Previous articleNext article No AccessSome Effects of the Bankruptcy Reform Act of 1978William J. Boyes, and Roger L. FaithWilliam J. Boyes Search for more articles by this author , and Roger L. Faith Search for more articles by this author PDFPDF PLUS Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinkedInRedditEmail SectionsMoreDetailsFiguresReferencesCited by The Journal of Law and Economics Volume 29, Number 1Apr., 1986 Sponsored by The University of Chicago Booth School of Business and The University of Chicago Law School Article DOIhttps://doi.org/10.1086/467112 Views: 7Total views on this site Citations: 29Citations are reported from Crossref Copyright 1986 The University of ChicagoPDF download Crossref reports the following articles citing this article:Jonathan D. Fisher SOCIAL INFLUENCE AND THE CONSUMER BANKRUPTCY DECISION, Contemporary Economic Policy 38, no.33 (Nov 2019): 474–482.https://doi.org/10.1111/coep.12449Nicolae Stef Bankruptcy and the difficulty of firing, International Review of Law and Economics 54 (Jun 2018): 85–94.https://doi.org/10.1016/j.irle.2017.11.002Igor Livshits Recent Developments in Consumer Credit and Default Literature, (Mar 2016): 9–31.https://doi.org/10.1002/9781119158424.ch2Igor Livshits RECENT DEVELOPMENTS IN CONSUMER CREDIT AND DEFAULT LITERATURE, Journal of Economic Surveys 29, no.44 (Aug 2015): 594–613.https://doi.org/10.1111/joes.12119Kenneth Hunsader, Natalya Delcoure, Gwendolyn Pennywell Competitive strategy and industry contagion following traditional Chapter 11 bankruptcy announcements, Managerial Finance 39, no.1111 (Oct 2013): 1032–1055.https://doi.org/10.1108/MF-12-2012-0256Vito Gala, Jodie A. Kirshner, Paolo F. Volpin The Political Economy of Personal Bankruptcy Law, SSRN Electronic Journal (Jan 2013).https://doi.org/10.2139/ssrn.2359591Igor Livshits, James MacGee, Michèle Tertilt Accounting for the Rise in Consumer Bankruptcies, American Economic Journal: Macroeconomics 2, no.22 (Apr 2010): 165–193.https://doi.org/10.1257/mac.2.2.165Richard M. Hynes, Amanda E. Dawsey, Lawrence M. Ausubel The Regulation of Non-Judicial Debt Collection and the Consumer's Choice Among Repayment, Bankruptcy and Informal Bankruptcy, SSRN Electronic Journal (Jan 2009).https://doi.org/10.2139/ssrn.1487649Nico Dewaelheyns, Cynthia Van Hulle Legal reform and aggregate small and micro business bankruptcy rates: evidence from the 1997 Belgian bankruptcy code, Small Business Economics 31, no.44 (Jul 2007): 409–424.https://doi.org/10.1007/s11187-007-9060-3Thomas A. Garrett, Mark W. Nichols Do casinos export bankruptcy?, The Journal of Socio-Economics 37, no.44 (Aug 2008): 1481–1494.https://doi.org/10.1016/j.socec.2006.12.079Michelle J. White Chapter 14 Bankruptcy Law, (Jan 2007): 1013–1072.https://doi.org/10.1016/S1574-0730(07)02014-2Nico Dewaelheyns, Cynthia Van Hulle Aggregate Bankruptcy Rates and the Macroeconomic Environment: Forecasting Systematic Probabilities of Default, SSRN Electronic Journal (Jan 2007).https://doi.org/10.2139/ssrn.1025805Nico Dewaelheyns, Cynthia Van Hulle Legal Reform and Aggregate Small and Micro Business Bankruptcy Rates: Evidence from the 1997 Belgian Bankruptcy Code, SSRN Electronic Journal (Jan 2006).https://doi.org/10.2139/ssrn.905196Bradley A. Hansen, Mary Hansen Legal Rules and Bankruptcy Rates: Historical Evidence from the States, SSRN Electronic Journal (Jan 2006).https://doi.org/10.2139/ssrn.954393Randal C. Picker Corporate Reorganizations, (Jan 2002): 511–517.https://doi.org/10.1007/978-1-349-74173-1_98Richard M. Hynes, Eric A. Posner Law and Economics of Consumer Finance, SSRN Electronic Journal (Jan 2001).https://doi.org/10.2139/ssrn.261109Mark W. Nichols, B. Grant Stitt, David Giacopassi Casino gambling and bankruptcy in new United States casino jurisdictions, The Journal of Socio-Economics 29, no.33 (May 2000): 247–261.https://doi.org/10.1016/S1053-5357(00)00071-8Bradley Hansen The People's Welfare and the Origins of Corporate Reorganization: The Wabash Receivership Reconsidered, Business History Review 74, no.33 (Dec 2011): 377–405.https://doi.org/10.2307/3116432Sugato Chakravarty, Eun-Young Rhee Factors Affecting an Individual's Bankruptcy Filing Decision, SSRN Electronic Journal (Jan 1999).https://doi.org/10.2139/ssrn.164351Richard M. Hynes, Jeremy Berkowitz Bankruptcy Exemptions and the Market for Mortgage Loans, SSRN Electronic Journal (Jan 1998).https://doi.org/10.2139/ssrn.123548Scott A. Fay, Erik Hurst, Michelle J. White The Bankruptcy Decision: Does Stigma Matter?, SSRN Electronic Journal (Jan 1998).https://doi.org/10.2139/ssrn.70915R. Gropp, J. K. Scholz, M. J. White Personal Bankruptcy and Credit Supply and Demand, The Quarterly Journal of Economics 112, no.11 (Feb 1997): 217–251.https://doi.org/10.1162/003355397555172Ian H. Domowitz, Robert Sartain Determinants of the Consumer Bankruptcy Decision, SSRN Electronic Journal (Jan 1997).https://doi.org/10.2139/ssrn.70 Ian Domowitz , and Thomas L. Eovaldi The Impact of the Bankruptcy Reform Act of 1978 on Consumer Bankruptcy, The Journal of Law and Economics 36, no.22 (Oct 2015): 803–835.https://doi.org/10.1086/467298John Hudson The impact of the new bankruptcy code upon the average liability of bankrupt firms, Journal of Banking & Finance 16, no.22 (Apr 1992): 351–371.https://doi.org/10.1016/0378-4266(92)90019-VPeter Newman, Murray Milgate, John Eatwell P, (Jan 1992): 115–244.https://doi.org/10.1007/978-1-349-11721-5_3John M. Gowdy Toward a Non-Marginalist Theory of Economic Change, Journal of Interdisciplinary Economics 4, no.11 (Jul 2016): 71–89.https://doi.org/10.1177/02601079X9100400105JULIAN R. FRANKS, WALTER N. TOROUS An Empirical Investigation of U.S. Firms in Reorganization, The Journal of Finance 44, no.33 (Apr 2012): 747–769.https://doi.org/10.1111/j.1540-6261.1989.tb04389.xTeresa A. Sullivan, Elizabeth Warren, Jay Lawrence Westbrook Laws, Models, and Real People: Choice of Chapter in Personal Bankruptcy, Law & Social Inquiry 13, no.0404 (Dec 2018): 661–706.https://doi.org/10.1111/j.1747-4469.1988.tb01132.x

Personal Bankruptcies

Previous articleNext article No AccessPersonal BankruptciesVincent P. Apilado, Joel J. Dauten, and Douglas E. SmithVincent P. Apilado Search for more articles by this author , Joel J. Dauten Search for more articles by this author , and Douglas E. Smith Search for more articles by this author PDFPDF PLUS Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinkedInRedditEmail SectionsMoreDetailsFiguresReferencesCited by The Journal of Legal Studies Volume 7, Number 2Jun., 1978 Sponsored by The University of Chicago Law School Article DOIhttps://doi.org/10.1086/467599 Views: 7Total views on this site Citations: 16Citations are reported from Crossref PDF download Crossref reports the following articles citing this article:Michelle M Miller Who Files for Bankruptcy? The Heterogeneous Impact of State Laws on a Household’s Bankruptcy Decision, American Law and Economics Review 21, no.22 (Aug 2019): 247–279.https://doi.org/10.1093/aler/ahz010Richard M. Hynes, Amanda E. Dawsey, Lawrence M. Ausubel The Regulation of Non-Judicial Debt Collection and the Consumer's Choice Among Repayment, Bankruptcy and Informal Bankruptcy, SSRN Electronic Journal (Jan 2009).https://doi.org/10.2139/ssrn.1487649Bradley A. Hansen, Mary Hansen Legal Rules and Bankruptcy Rates: Historical Evidence from the States, SSRN Electronic Journal (Jan 2006).https://doi.org/10.2139/ssrn.954393Kelly D. Edmiston Regional Variation in Bankruptcy Filing Rates, SSRN Electronic Journal (Jan 2005).https://doi.org/10.2139/ssrn.899631 Richard M. Hynes , Anup Malani , and Eric A. Posner The Political Economy of Property Exemption Laws Hynes/Malani/Posner, The Journal of Law and Economics 47, no.11 (Jul 2015): 19–43.https://doi.org/10.1086/386276Richard M. Hynes, Eric A. Posner Law and Economics of Consumer Finance, SSRN Electronic Journal (Jan 2001).https://doi.org/10.2139/ssrn.261109Bradley Hansen The People's Welfare and the Origins of Corporate Reorganization: The Wabash Receivership Reconsidered, Business History Review 74, no.33 (Dec 2011): 377–405.https://doi.org/10.2307/3116432Richard M. Hynes, Jeremy Berkowitz Bankruptcy Exemptions and the Market for Mortgage Loans, SSRN Electronic Journal (Jan 1998).https://doi.org/10.2139/ssrn.123548Peter Newman, Murray Milgate, John Eatwell P, (Jan 1992): 115–244.https://doi.org/10.1007/978-1-349-11721-5_3A. CHARLENE SULLIVAN, DEBRA DRECNIK WORDEN Rehabilitation or Liquidation: Consumers' Choices in Bankruptcy, Journal of Consumer Affairs 24, no.11 (Mar 2005): 69–88.https://doi.org/10.1111/j.1745-6606.1990.tb00259.xALDEN F. SHIERS, DANIEL P. WILLIAMSON Nonbusiness Bankruptcies and the Law: Some Empirical Results, Journal of Consumer Affairs 21, no.22 (Mar 2005): 277–292.https://doi.org/10.1111/j.1745-6606.1987.tb00203.xLAWRENCE SHEPARD Accounting for the Rise in Consumer Bankruptcy Rates in the United States: A Preliminary Analysis of Aggregate Data (1945-1981), Journal of Consumer Affairs 18, no.22 (Mar 2005): 213–230.https://doi.org/10.1111/j.1745-6606.1984.tb00329.xA. CHARLENE SULLIVAN, DEBRA A. DRECNIK Social Efficiency of the Bankruptcy Reform Act of 1978 With Regard to Personal Bankruptcy, Journal of Consumer Affairs 18, no.22 (Mar 2005): 231–250.https://doi.org/10.1111/j.1745-6606.1984.tb00330.x Lawrence Shepard Personal Failures and the Bankruptcy Reform Act of 1978, The Journal of Law and Economics 27, no.22 (Oct 2015): 419–437.https://doi.org/10.1086/467072SAMUEL A. REA ARM-BREAKING, CONSUMER CREDIT AND PERSONAL BANKRUPTCY, Economic Inquiry 22, no.22 (Apr 1984): 188–208.https://doi.org/10.1111/j.1465-7295.1984.tb00678.xRichard L. Peterson, Kiyomi Aoki Bankruptcy filings before and after implementation of the bankruptcy reform law, Journal of Economics and Business 36, no.11 (Feb 1984): 95–105.https://doi.org/10.1016/0148-6195(84)90015-8

The Bankruptcy Decision

This paper investigates the circumstances under which a firm will be forced into bankruptcy. The model developed can be viewed as part of a larger framework which would be necessary to address the question of optimal financial policy in a world of taxation, bankruptcy costs, investment and depreciation, uncertainty, etc. The model focuses on the conflicts of interest among various claimants to the assets and income flows of the firm (the stockholders, bond-holders, and bank lenders). We derive conditions under which the necessary funds for continuation will not be forthcoming and illustrate the importance of the liquidity of the assets and the maturity structure of the debt in staving off bankruptcy. Several examples highlight the major conclusions of the paper. The conditions for bankruptcy, which have some intuitive appeal, are more complex than those appearing in the previous literature. The latter part of the paper considers merger with a healthy company as an alternative to bankruptcy. We show that the tax system has an important effect on the choice between merger and bankruptcy.

The municipal bankruptcy decision

National Municipal ReviewVolume 25, Issue 6 p. 311-312 Editorial The municipal bankruptcy decision First published: June 1936 https://doi.org/10.1002/ncr.4110250602Citations: 1AboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinkedInRedditWechat No abstract is available for this article.Citing Literature Volume25, Issue6June 1936Pages 311-312 RelatedInformation