Trading activity around chapter 11 filing

Patricia Chelley-Steeley; Neophytos Lambertides

doi:10.1016/j.irfa.2022.102130

Trading activity around chapter 11 filing

Patricia Chelley-Steeley^*, Neophytos Lambertides

^*Corresponding author for this work

Finance

Research output: Contribution to journal › Article › peer-review

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Abstract

This paper uses institutional ownership data and order flow information to document and explain equity trading patterns prior to chapter 11 bankruptcy filing.We provide a model that predicts trading activity prior to filing which results from a difference of opinion amongst different types of investors about whether the firm should be liquidated. We then test trading data to show that trading activity is elevated around chapter 11 filing as the model predicts. We show how institutional holdings change around filing and that chapter 7 firms appear relatively more attractive to institutional investors than emerging firms around filing.

Original language	English
Article number	102130
Number of pages	17
Journal	International Review of Financial Analysis
Volume	82
Early online date	9 Apr 2022
DOIs	https://doi.org/10.1016/j.irfa.2022.102130
Publication status	Published - Jul 2022

Bibliographical note

Publisher Copyright:
© 2022

Keywords

Chapter 11 and 7 Bankruptcy
Trading Activity
Institutional Ownership
Chapter 11 and 7 bankruptcy
Institutional ownership
Trading activity

ASJC Scopus subject areas

Economics and Econometrics
Finance

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10.1016/j.irfa.2022.102130Licence: None: All rights reserved

ChelleySteeleyP2022TradingAccepted author manuscript, 1.43 MBLicence: Creative Commons: Attribution-NonCommercial-NoDerivs (CC BY-NC-ND)
ChelleySteeleyP2022Trading_TablesAccepted author manuscript, 334 KBLicence: Creative Commons: Attribution-NonCommercial-NoDerivs (CC BY-NC-ND)

Cite this

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abstract = "This paper uses institutional ownership data and order flow information to document and explain equity trading patterns prior to chapter 11 bankruptcy filing.We provide a model that predicts trading activity prior to filing which results from a difference of opinion amongst different types of investors about whether the firm should be liquidated. We then test trading data to show that trading activity is elevated around chapter 11 filing as the model predicts. We show how institutional holdings change around filing and that chapter 7 firms appear relatively more attractive to institutional investors than emerging firms around filing. ",

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Trading activity around chapter 11 filing

Abstract

Bibliographical note

Keywords

ASJC Scopus subject areas

Access to Document

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Cite this