Secured debt and the likelihood of reorganization

Theory suggests that secured creditors may increasingly oppose a debtor’s reorganization as the value of their collateral approaches the amount of their claims. If reorganization occurs and the value of the firm appreciates, the secured creditor receives only part of the gain. But if the firm’s value depreciates, the secured creditor bears all of the cost. Secured claimants, thus, often have more to lose than to gain in reorganizations. This study of Finnish reorganizations filed in districts that account for most of the country’s reorganizations finds that creditor groups most likely to be well-secured are most likely to oppose reorganization. We also find a negative correlation between how well-secured banks and other institutional lenders are and the likelihood of a confirmed reorganization plan. Limiting the priority of secured debt might stimulate reorganizations.     

Supportive Community Resources Are Associated with Lower Risk of Substance Use among Lesbian,Gay, Bisexual,and Questioning Adolescents in Minnesota

Journal of Youth and Adolescence - Research has indicated that lesbian, gay, bisexual, and queer/questioning (LGBQ) adolescents have disproportionately high rates of substance use compared to...