Debt Recovery in Firm Liquidations: Do Liquidation Trustees Matter?

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract Insolvency systems play a crucial role in protection of creditor rights, yet micro-level empirical evidence on the functioning of insolvency regimes worldwide is sparse. We investigate whether creditors' recovery of outstanding claims, a measure of ex-post efficiency of an insolvency regime, depends on the characteristics of the trustee delegated the administration of the liquidation proceedings. To this end, we draw on a novel dataset of firm liquidations from Slovenia and exploit courts' de facto random assignment of firm liquidation cases to licensed liquidation trustees. Using a wide range of specifications and controls, we find that a subset of trustee characteristics indeed matters for debt recovery. Thus, ex-post efficiency of an insolvency regime depends not only on its formal rules and procedures, but also on who implements them in practice. Terms of use: Documents inJEL-Codes: G330, K220, P370.

Productive entrepreneurship and the effectiveness of insolvency legislation: a cross-country study

“…While taxes and interest rates mainly affect the profitability of entrepreneurship, insolvency laws represent a crucial aspect of the tradeoffs for individuals considering starting a business or not. From a societal perspective, the goal of insolvency regimes is to maximize the value of assets subject to the insolvency regime (Cepec et al 2016;Hart 2000). However, insolvency laws can be regarded as a barrier to both entry and exit (Lee et al 2007(Lee et al , 2011.…”