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Social sciences
- Financial economics
- Law and economics
- Econometric modelling
Bankruptcy court competition may lead to an increased pro-debtor biased decision making in big-case Chapter 11 procedures. We test this hypothesis in response to a shift of popularity for big-case Chapter 11 procedures from the bankruptcy court of Delaware to the one of South District of Texas. Our first empirical evidence confirms that there is an increased tendency of judicial decisions to be more in favor of the debtor than the creditor. In this project we want to disentangle the causal effects behind the increase in pro-debtor jucidial decision making and understand how the behavior of judges and firms influence each other. We contribute additional insights through textual analysis of public court files and analyze the economic effects of pro-debtor judicial decision making.