, 1994, "A comparison of financial contracting in distressed exchanges and Chapter 11 reorganizations," Journal of Financial Economics, Vol.
In addition, there have been cases in which an otherwise solvent firm has sought the protection of the bankruptcy court for previously unanticipated future legal liabilities (see Franks and Torous
, "Investigating Security-Price Performance in the Presence of Event-Date Uncertainty," Journal of Financial Economics, 22:1, 1988, 123-154.
, 1989, Prepayment and the Valuation of Mortgage-Backed Securities, Journal of Finance, 44: 375-392.
6) The UK bankruptcy regime differs significantly to Chapter 11 in the United States (see Franks, Nyborg, and Torous
, 1996, for a detailed analysis) and it is very rare indeed for stockholders to receive any terminal distribution (Kaiser, 1996).
Franks and Torous
(1989) note the direct and indirect costs of bankruptcy.
In this article, we compare the out-of the sample performance of the information cost model (denoted ICM) with as benchmark, the jump diffusion model (denoted JDM) of Ball and Torous
(1983, 1985) and Maltz (1996).
Healy LN, Pluta LJ, James RA, Janszen DB, Torous
D, French JE, et al.
, founding director of the Ziman Center for Real Estate and professor of finance at UCLA Anderson School of Management, and Walter Smiechewicz, an enterprise risk management expert, are the panel's newest additions.
In contrast to the traditional asset pricing theories that assume investors have unlimited information capacity, in reality few investors pay attention to all sources of information, and much less understand their impact on assets prices (Hong, Torous
, and Valkanov, 2007).
Ball and Torous
(1996) used this framework to estimate parameters of the one-factor CIR model in a simulation study.
Belker, Franks and Torous
(1999) find once the result of a workout attempt is known, the returns to shareholders are greater for firms which successfully complete a private workout arrangement.