Publicly Traded Debt Restructuring Methods, Corporate Investment, and Debt Contracting
利用一项法院裁决研究两种公开交易债务重组方法（强制债券交换要约与破产重组第11章）的经济作用，发现裁决后受影响困境公司投资减少但效率提升，债券契约条款变化显示现有债券持有人议价能力增强。
I use an important ruling, Marblegate Asset Management v. Education Management Corporation (EMC), to study the economic role of two publicly traded debt restructuring methods: coercive bond exchange offers and Chapter 11. This ruling restricted firms from employing coercive bond exchange offers to facilitate out-of-court restructurings, thereby increasing the likelihood of restructuring publicly traded debt under Chapter 11. Following the ruling, investment in affected distressed firms decreased substantially, but investment efficiency improved. The changes in covenant, maturity, and offering yield of newly issued bonds suggested that existing bondholders with covenants gained more bargaining power than shareholders and new bondholders. The paper provides causal evidence from a large sample analysis, demonstrating the divergent effects of these two publicly traded debt restructuring methods on investment policies. This paper was accepted by Victoria Ivashina, finance. Funding: Funding for this research was provided by University of Pittsburgh (Doctoral Fellowship) and Vanderbilt University (standard research funds). Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2022.01831 .