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Resolution of corporate insolvency during COVID-19 pandemic. Evidence from France

We investigate how the lockdown enforcement by French authorities is associated with the resolution of corporate insolvency. In this sense, we make a distinction between four legal procedures, namely the amicable liquidation (out-of-court exit), the judicial liquidation (court-driven exit), the rest...

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Detalles Bibliográficos
Autores principales: Stef, Nicolae, Bissieux, Jean-Joachim
Formato: Online Artículo Texto
Lenguaje:English
Publicado: The Author(s). Published by Elsevier Inc. 2022
Materias:
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8893952/
https://www.ncbi.nlm.nih.gov/pubmed/35261416
http://dx.doi.org/10.1016/j.irle.2022.106063
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author Stef, Nicolae
Bissieux, Jean-Joachim
author_facet Stef, Nicolae
Bissieux, Jean-Joachim
author_sort Stef, Nicolae
collection PubMed
description We investigate how the lockdown enforcement by French authorities is associated with the resolution of corporate insolvency. In this sense, we make a distinction between four legal procedures, namely the amicable liquidation (out-of-court exit), the judicial liquidation (court-driven exit), the restructuring procedure available to non-defaulted firms, and the restructuring procedure available to defaulted firms. Using a sample of 3488 non-listed and non-financial French firms, our estimates yield three major findings. First, the likelihood of judicial liquidation increased after the lifting of the quarantines compared to the pre-pandemic period. Second, the non-defaulted firms had a higher likelihood to reorganize in court during the second lockdown. Third, the lifting of the first lockdown led to a decrease in the probability of restructuring the assets of defaulted firms. Although the main objective of the lockdown was to limit spread of the virus, its enforcement has not encouraged the use of the out-of-court exit path.
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spelling pubmed-88939522022-03-04 Resolution of corporate insolvency during COVID-19 pandemic. Evidence from France Stef, Nicolae Bissieux, Jean-Joachim Int Rev Law Econ Article We investigate how the lockdown enforcement by French authorities is associated with the resolution of corporate insolvency. In this sense, we make a distinction between four legal procedures, namely the amicable liquidation (out-of-court exit), the judicial liquidation (court-driven exit), the restructuring procedure available to non-defaulted firms, and the restructuring procedure available to defaulted firms. Using a sample of 3488 non-listed and non-financial French firms, our estimates yield three major findings. First, the likelihood of judicial liquidation increased after the lifting of the quarantines compared to the pre-pandemic period. Second, the non-defaulted firms had a higher likelihood to reorganize in court during the second lockdown. Third, the lifting of the first lockdown led to a decrease in the probability of restructuring the assets of defaulted firms. Although the main objective of the lockdown was to limit spread of the virus, its enforcement has not encouraged the use of the out-of-court exit path. The Author(s). Published by Elsevier Inc. 2022-06 2022-03-03 /pmc/articles/PMC8893952/ /pubmed/35261416 http://dx.doi.org/10.1016/j.irle.2022.106063 Text en © 2022 The Author(s) Since January 2020 Elsevier has created a COVID-19 resource centre with free information in English and Mandarin on the novel coronavirus COVID-19. The COVID-19 resource centre is hosted on Elsevier Connect, the company's public news and information website. Elsevier hereby grants permission to make all its COVID-19-related research that is available on the COVID-19 resource centre - including this research content - immediately available in PubMed Central and other publicly funded repositories, such as the WHO COVID database with rights for unrestricted research re-use and analyses in any form or by any means with acknowledgement of the original source. These permissions are granted for free by Elsevier for as long as the COVID-19 resource centre remains active.
spellingShingle Article
Stef, Nicolae
Bissieux, Jean-Joachim
Resolution of corporate insolvency during COVID-19 pandemic. Evidence from France
title Resolution of corporate insolvency during COVID-19 pandemic. Evidence from France
title_full Resolution of corporate insolvency during COVID-19 pandemic. Evidence from France
title_fullStr Resolution of corporate insolvency during COVID-19 pandemic. Evidence from France
title_full_unstemmed Resolution of corporate insolvency during COVID-19 pandemic. Evidence from France
title_short Resolution of corporate insolvency during COVID-19 pandemic. Evidence from France
title_sort resolution of corporate insolvency during covid-19 pandemic. evidence from france
topic Article
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8893952/
https://www.ncbi.nlm.nih.gov/pubmed/35261416
http://dx.doi.org/10.1016/j.irle.2022.106063
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