The Reorganization of Closely Held Firms and the “Opt Out” Problem

Abstract

This Article argues that the ability of parties to shape their investments in firms is responsible for the small costs of bankruptcy. The paper focuses on how investors can minimize the costs of bankruptcy even when they do not take steps to avoid it altogether.

Keywords

Closely held corporations, Corporate reorganizations, Close corporations, Bankruptcy reorganization

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Authors

Douglas G. Baird (The University of Chicago)

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