6 ms·

Feel free to look for contradictory numbers yourself, if you have reason to believe that Chapter 11 outcomes have somehow radically changed in the past years.

Feel free to look for contradictory numbers yourself, if you have reason to believe that Chapter 11 outcomes have somehow radically changed in the past years. What hasn't changed is the fact that Chapter 11 doesn't discharge debt. The prospect of having the creditors repaid at least in part is a prerequisite to Chapter 11.

ikeboy 7y ago
https://www.justice.gov/sites/default/files/ust/legacy/2011/07/13/abi_200905.pdf https://www.justice.gov/sites/default/files/ust/legacy/2011/... Page six has around 22% converted and 10% still open. The rest were either dismissed or confirmed, and constitute a majority of cases.
- gridlockd 7y ago
  These numbers don't actually support you. "Still open" means the case is ongoing, so those numbers are irrelevant. "Conversion" means going from Chapter 11 to Chapter 7 right away. "Dismissal" doesn't mean success or failure, it means the case is dismissed. "Confirmed" means that the case will proceed as Chapter 11 instead of being converted or dismissed outright. That can still lead to Chapter 7 later on if the restructuring fails.
  - ikeboy 7y ago
    Dismissal and Confirmed mean the company continues to exist, and add up to a majority. Sure, any company, including those that successfully emerged from Chapter 11, may file for Chapter 7 later. But generally once it's confirmed it's considered a success.
    - gridlockd 7y ago
      > Dismissal and Confirmed mean the company continues to exist, and add up to a majority. Of course confirmation implies that the company continues to exist in order to for the restructuring to actually take place, it doesn't imply that it will exist afterwards. Dismissal doesn't imply that the company will continue to exist for much longer either, it's simply the alternative to going straight to Chapter 7. In any event, dismissal is not a success. You are also ignoring all the cases that go straight to Chapter 7 for your hamfisted construction of a "majority". No matter how you twist and turn it, the majority of companies that file for bankruptcy do not survive, and the companies that do succeed in Chapter 11 still have to repay debt. That's my whole point.
ikeboy 7y ago
Here's another study by none other than the author of the plan in OP https://repository.law.umich.edu/cgi/viewcontent.cgi?article=1349&context=mlr https://repository.law.umich.edu/cgi/viewcontent.cgi?article...
- gridlockd 7y ago
  This paper really only shows that: 1) Confirmation rates are actually higher than commonly believed (= roughly one third) 2) If we carefully select for companies that are likely to succeed with confirmation, success rates are higher. Well, duh. There's a valid argument there, saying that the value of Chapter 11 should not be measured in terms of confirmation rates, because hopeless cases are hopeless no matter how good the law is. Yet, this doesn't support your view that most companies that file for bankruptcy will survive. If anything, it shows the opposite.

ikeboy 7y ago

https://www.justice.gov/sites/default/files/ust/legacy/2011/07/13/abi_200905.pdf https://www.justice.gov/sites/default/files/ust/legacy/2011/... Page six has around 22% converted and 10% still open. The rest were either dismissed or confirmed, and constitute a majority of cases.

gridlockd 7y ago
These numbers don't actually support you. "Still open" means the case is ongoing, so those numbers are irrelevant. "Conversion" means going from Chapter 11 to Chapter 7 right away. "Dismissal" doesn't mean success or failure, it means the case is dismissed. "Confirmed" means that the case will proceed as Chapter 11 instead of being converted or dismissed outright. That can still lead to Chapter 7 later on if the restructuring fails.
- ikeboy 7y ago
  Dismissal and Confirmed mean the company continues to exist, and add up to a majority. Sure, any company, including those that successfully emerged from Chapter 11, may file for Chapter 7 later. But generally once it's confirmed it's considered a success.
  - gridlockd 7y ago
    > Dismissal and Confirmed mean the company continues to exist, and add up to a majority. Of course confirmation implies that the company continues to exist in order to for the restructuring to actually take place, it doesn't imply that it will exist afterwards. Dismissal doesn't imply that the company will continue to exist for much longer either, it's simply the alternative to going straight to Chapter 7. In any event, dismissal is not a success. You are also ignoring all the cases that go straight to Chapter 7 for your hamfisted construction of a "majority". No matter how you twist and turn it, the majority of companies that file for bankruptcy do not survive, and the companies that do succeed in Chapter 11 still have to repay debt. That's my whole point.

ikeboy 7y ago

Here's another study by none other than the author of the plan in OP https://repository.law.umich.edu/cgi/viewcontent.cgi?article=1349&context=mlr https://repository.law.umich.edu/cgi/viewcontent.cgi?article...

gridlockd 7y ago
This paper really only shows that: 1) Confirmation rates are actually higher than commonly believed (= roughly one third) 2) If we carefully select for companies that are likely to succeed with confirmation, success rates are higher. Well, duh. There's a valid argument there, saying that the value of Chapter 11 should not be measured in terms of confirmation rates, because hopeless cases are hopeless no matter how good the law is. Yet, this doesn't support your view that most companies that file for bankruptcy will survive. If anything, it shows the opposite.