Intraday price reaction to filing bankruptcy and restructuring proceedings – the evidence from Poland

Prusak, Błażej; Potrykus, Marcin

doi:10.4324/9781003199076-7

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“…All such cases for which the event date differed from the public disclosure date are indicated in bold in Appendix 1. The public disclosure of information about a given event, depending on its occurrence during an active trading session or outside it, was also the basis for grouping the studied sample into two subsamples, because-as demonstrated in previous studies-the information appearing during an active trading session has a different impact on the trading than in cases when the trading session is not active [Prusak and Potrykus, 2021b]. The sample also includes one company (see Appendix 1) that went through the entire procedure twice -first in 2011 and then in 2018.…”

Section: Methodsmentioning

confidence: 99%

Stock price reaction to an arrangement approval in restructuring proceedings – the case of Poland

Prusak

Potrykus

2022

International Journal of Management and Economics

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The study aims to empirically analyze the reaction of stock prices to the information about the conclusion and acceptance of a debtor–creditor arrangement under restructuring proceedings of companies listed on the stock exchange in Poland. The following main research hypothesis was verified: public disclosure of information about an arrangement conclusion and acceptance in restructuring proceedings results in above-average rates of return due to investments in the stocks of these entities in the short term. Three events were assessed: the public disclosure of information about the conclusion of a debtor–creditor arrangement (Event 1), its approval by a court (Event 2), and the decision becoming final (Event 3). The research method applied was the event study. Event 1 and Event 3 leads to an above-average and statistically significant increase in stock prices on the day of the event. In contrast, no statistically significant above-average rates of return accompanied Event 2.

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Section: Methodsmentioning

confidence: 99%