Agency Problems of Debt, Convertible Securities, and Deviations from Absolute Priority in Bankruptcy
研究了可转换债券能否减少公司过度冒险行为，发现若利益相关者可交易衍生品则其作用减弱，而破产法院偏离绝对优先权可达到同样效果，并解释了破产法为何偏向股东及小公司为何多用可转换债。
It has been suggested that convertible debt can be used to reduce the tendency toward excessive risk taking in a firm that includes debt in its capital structure. We show that the ability of convertible debt to perform this function is greatly reduced if stakeholders can trade in derivative securities with payoffs contingent on the cash flows of the firm. We show, further, that bankruptcy courts can ensure the same result precisely by deviating from absolute priority. Our model explains two real-world phenomena; one, why bankruptcy law seems to be structured in such a way as to favor equity holders and facilitate deviations from absolute priority, and two, why small firms are more likely to use convertible debt.