Filtering Speed In A Continental European Reorganization Procedure

Recent empirical studies of U.S. show it is a relatively efficient procedure. The authors examine reorganization cases in a Continental European, creditor-oriented bankruptcy system, viz. Belgium, and report very different findings. Using hazard regression models to determine what drives the length of time spent in unsuccessful reorganizations, they find evidence suggesting that courts have little impact on the screening and filtering process. In fact, virtually all drivers of procedure length prove to have the opposite sign of what one would expect if the procedure would efficiently realise its goals. Instead, the procedure appears to be mainly creditor driven.