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The uneasy case for rehabilitating small firms under the 1997-reorganization law in Belgium: evidence from reorganization plans

Bart Leyman UGent (2012) EUROPEAN JOURNAL OF LAW AND ECONOMICS. 34(3). p.533-560
abstract
Using a sample of small Belgian firms that reorganized under the 1997 Law on Judicial Composition, I empirically review the law's effectiveness to rehabilitate distressed debtors. The econometric findings show that firms with less pre-bankruptcy operational losses and a better cash position are more likely to successfully execute their reorganization plan and that certain debt restructuring measures can contribute to firm rescue. Despite these positive findings, many firms still failed to reorganise under the 1997-reorganization law, which resulted in constant criticism on its effectiveness leading up to its recent replacement in 2009. My data also shows that within the former reorganization procedure the Belgian debtor was faced with high debt instalment payments compared to international practice and that successful plan execution relied too much on the uncertain realization of the operational cash flow projections. In discussing the legal framework of the new Law on Corporate Continuity enacted in 2009-replacing the 1997-law-I argue that this new law is a more effective legislation to save distressed businesses.
Please use this url to cite or link to this publication:
author
organization
year
type
journalArticle (original)
publication status
published
subject
keyword
Insolvency regulation, Reorganization plan, Bankruptcy, Court-supervised reorganization, ABOLISH CHAPTER 11, FINANCIAL REORGANIZATION, BANKRUPTCY, LIQUIDATION, DECISION, COSTS, PRIORITY, CANADA, CLAIMS
journal title
EUROPEAN JOURNAL OF LAW AND ECONOMICS
Eur. J. Law Econ.
volume
34
issue
3
pages
533 - 560
Web of Science type
Article
Web of Science id
000311365200006
JCR category
LAW
JCR impact factor
0.292 (2012)
JCR rank
107/134 (2012)
JCR quartile
4 (2012)
ISSN
0929-1261
DOI
10.1007/s10657-010-9206-7
language
English
UGent publication?
yes
classification
A1
copyright statement
I have transferred the copyright for this publication to the publisher
id
1109886
handle
http://hdl.handle.net/1854/LU-1109886
date created
2011-01-25 12:14:07
date last changed
2015-06-17 09:23:07
@article{1109886,
  abstract     = {Using a sample of small Belgian firms that reorganized under the 1997 Law on Judicial Composition, I empirically review the law's effectiveness to rehabilitate distressed debtors. The econometric findings show that firms with less pre-bankruptcy operational losses and a better cash position are more likely to successfully execute their reorganization plan and that certain debt restructuring measures can contribute to firm rescue. Despite these positive findings, many firms still failed to reorganise under the 1997-reorganization law, which resulted in constant criticism on its effectiveness leading up to its recent replacement in 2009. My data also shows that within the former reorganization procedure the Belgian debtor was faced with high debt instalment payments compared to international practice and that successful plan execution relied too much on the uncertain realization of the operational cash flow projections. In discussing the legal framework of the new Law on Corporate Continuity enacted in 2009-replacing the 1997-law-I argue that this new law is a more effective legislation to save distressed businesses.},
  author       = {Leyman, Bart},
  issn         = {0929-1261},
  journal      = {EUROPEAN JOURNAL OF LAW AND ECONOMICS},
  keyword      = {Insolvency regulation,Reorganization plan,Bankruptcy,Court-supervised reorganization,ABOLISH CHAPTER 11,FINANCIAL REORGANIZATION,BANKRUPTCY,LIQUIDATION,DECISION,COSTS,PRIORITY,CANADA,CLAIMS},
  language     = {eng},
  number       = {3},
  pages        = {533--560},
  title        = {The uneasy case for rehabilitating small firms under the 1997-reorganization law in Belgium: evidence from reorganization plans},
  url          = {http://dx.doi.org/10.1007/s10657-010-9206-7},
  volume       = {34},
  year         = {2012},
}

Chicago
Leyman, Bart. 2012. “The Uneasy Case for Rehabilitating Small Firms Under the 1997-reorganization Law in Belgium: Evidence from Reorganization Plans.” European Journal of Law and Economics 34 (3): 533–560.
APA
Leyman, Bart. (2012). The uneasy case for rehabilitating small firms under the 1997-reorganization law in Belgium: evidence from reorganization plans. EUROPEAN JOURNAL OF LAW AND ECONOMICS, 34(3), 533–560.
Vancouver
1.
Leyman B. The uneasy case for rehabilitating small firms under the 1997-reorganization law in Belgium: evidence from reorganization plans. EUROPEAN JOURNAL OF LAW AND ECONOMICS. 2012;34(3):533–60.
MLA
Leyman, Bart. “The Uneasy Case for Rehabilitating Small Firms Under the 1997-reorganization Law in Belgium: Evidence from Reorganization Plans.” EUROPEAN JOURNAL OF LAW AND ECONOMICS 34.3 (2012): 533–560. Print.