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| Author: | Eberhart, A. C. Moore, W. T. Roemfeldt, R. L. |
| Title: | Security pricing and deviations from the absolute priority rule in bankruptcy proceedings |
| Journal: | Journal of Finance
1990 : DEC, VOL. 45:5, p. 1457-1469 |
| Index terms: | SECURITIES PRICING BANKRUPTCY SHAREHOLDERS SHARE VALUATION STOCK MARKETS EQUITY CAPITAL |
| Language: | eng |
| Abstract: | Claims ultimately awarded to shareholders of USA firms in reorganization were examined. The amount paid to shareholders in excess of that which they would have received under the absolute priority rule represents, on average, 7,6 p.c. of the total awarded to all claimants. Evidence is reported that common share values reflect a significant proportion of value ultimately received in violation of absolute priority, suggesting that deviations from te rule were expected by the equity market. |
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