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Large Shareholders and Financial Distress

Christian C. Opp

出版	SSRN, 2019
URL	http://books.google.com.hk/books?id=bKj9zgEACAAJ&hl=&source=gbs_api

註釋

I examine large shareholders' externalities on other claim holders when firms are financially distressed. To this end, I develop a tractable dynamic model of the interplay between these blockholders and regular equity holders. Blockholders' information acquisition and investment decisions play a pivotal role in distressed firms' access to finance, affecting both total firm value and its distribution across claims. The impact on distress costs is non-monotone; whereas blockholders' information exacerbates debt overhang for intermediate levels of distress, it increases firms' survival chances in deep distress. These findings reveal that frictions delaying block acquisitions to "last minute" rescue interventions can in fact be efficiency-enhancing.