|dc.description.abstract||In this thesis our objective is to expand current knowledge on determinants of Chapter
11 outcomes. We do this by investigating pre- and post-reorganization leverage from a
sample of 103 large public U.S. firms filing for bankruptcy in the period 1990-2013, that
emerge as public firms. Specifically, we examine leverage for firms recontracting under
Chapter 11 and analyze outcomes based on how, when and where the firms reorganize.
We estimate the probability that firms emerge with leverage above their industry
median, and arrive at the conclusion that firms twice as leveraged as the industry
when filing for Chapter 11 are up to ∼32 times more likely to be over-leveraged when
emerging. Our analysis suggests that high leverage appears to be chronic. Significant
factors impacting post-bankruptcy leverage are identified and include; pre-filing capital
structure, venue choice and asset liquidations. Further, we find that the amendments
to the U.S. Bankruptcy Code under the Bankruptcy Abuse Prevention and Consumer
Protection Act do not seem to affect the reorganization outcome for firms in our sample.
To the best of our knowledge, the results in this thesis are unique. As our review of
related literature uncovers, post-reorganization leverage remains unexplored territory.
In particular, we are the first to explain leverage for firms that emerge, based on how,
when and where these firms reorganize.||nb_NO