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LSF Lunch Seminar : Trade Creditors' Information Advantage

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Conférencier : Benjamin Iverson - Northwestern University
Date de l'événement : jeudi, 29 juin 2017, 12:30 - 13:45
Lieu : Luxembourg School of Finance
JFK Building
29,Avenue J.F Kennedy
L-1855 Luxembourg

Abstract

Using information on the sales of debt claims for 132 U.S. Chapter 11 bankruptcy cases, we show that large trade creditors’ decisions to sell receivables of a distressed company in bankruptcy are predictive of lower recovery rates, and that in such cases these creditors sell ahead of less informed suppliers and other creditors. This result is especially pronounced for distressed firms that rely most heavily on trade credit as their source of financing. This evidence shows that suppliers that extend significant amounts of trade credit hold private information about their trade partners. Trade creditors who are geographically closer or in similar industries tend to lend the most, suggesting that these are two channels through which suppliers hold an information advantage.

Fichier : Invitation_B.Iverson_29.06.2017.pdf 453,49 kB