I am grateful to Tumi Adebiyi and Siddharth Vij for excellent research assistance, and I thank Jianping Mei, Michael Moses, and Ashley Newton for graciously sharing their data with me. I appreciate helpful comments from David Lesmond, Ashley Newton, Gudrun Rolle, Siddharth Vij, seminar participants at Tulane, and students in my NYU doctoral seminar on corporate distress and restructuring. Part of this paper was completed while I was a visiting professor at Erasmus University Rotterdam. The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research.NBER working papers are circulated for discussion and comment purposes. They have not been peerreviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.