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Review of Law & Economics

Editor-in-Chief: Parisi, Francesco / Engel, Christoph

Ed. by Cooter, Robert D. / Gómez Pomar, Fernando / Kornhauser, Lewis A. / Parchomovsky, Gideon / Franzoni, Luigi Alberto

CiteScore 2018: 0.32

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Source Normalized Impact per Paper (SNIP) 2018: 0.493

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Volume 13, Issue 1


Voting Rules in Bankruptcy Law

Nicolae Stef
  • Corresponding author
  • LaRGE, University of Strasbourg, 47 Avenue de la Fôret Noire, 67082, Strasbourg Cedex, France
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Published Online: 2016-07-02 | DOI: https://doi.org/10.1515/rle-2014-0063


We empirically evaluate creditors’ voting conditions and the bankruptcy voting rules of 90 countries. The severity of a voting rule is determined by the threshold values of the majority-voting rules by which creditors impose their interests. The higher the threshold values, the higher is the severity degree of the rule. We find that the bankruptcy laws of countries with German and French legal origin tend to have the least severe voting rules. The Nordic countries have moderate rules. The laws of the common law countries have the most severe rules. These results hold for secured and unsecured claimants. The court’s legal right of overcoming the voting result is granted more often by bankruptcy laws of French and German legal origin. The severity of the voting rules can influence the recovery of creditors’ debt. We show that a coalition of creditors that has a common interest can use the severity of the voting rule to influence the approval of a reorganization plan that provides a higher recovery rate of the creditors’ debt.

Keywords: bankruptcy; reorganization; severity; voting rules

JEL Classification: G33; K29; D79


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About the article

Published Online: 2016-07-02

Published in Print: 2017-03-01

Citation Information: Review of Law & Economics, Volume 13, Issue 1, 20140063, ISSN (Online) 1555-5879, ISSN (Print) 2194-6000, DOI: https://doi.org/10.1515/rle-2014-0063.

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