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David Eccles School of Business
U.S. Bankruptcy Process Works, Weeds Out Weak, Finds University of Utah Study of 530 Companies
January 24th, 2009
With high-profile company bankruptcies becoming distressingly common, many would be hard-pressed to find an upside. According to a new study by three finance researchers at the University of Utah's David Eccles School of Business, however, there might be a silver lining of sorts: the effectiveness of the U.S. bankruptcy system. They found that 80% of fundamentally sound companies - those with good business models but too much debt - reorganized and emerged from Chapter 11 with only 7% fewer assets. On the other hand, just 37% of economically distressed companies - those with severe business problems such as poor management,...
Source: Law & Health Weekly (2009-01-24)
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