14
May
2024
14:15
- 15:45
IWH Research Seminar
Do Rights Offerings Reduce Bargaining Complexity in Chapter 11
Who
Gunjan Seth
(University of Southern California, Marshall School of Business)
Where
IWH, conference room and via Zoom
This paper investigates the role of rights offerings in U.S. Chapter 11 reorganizations as a new market-based mechanism for mitigating bargaining frictions. Using hand-collected data, I document three novel facts: (i) in the past decade, rights offerings financed 47% of bankruptcies, (ii) they are typically proposed and underwritten by hedge funds or private equity firms, and (iii) their occurrence is highly correlated with stock market performance.