In my article Chapter 11, Corporate Governance and the Role of Examiners, I propose a possible solution to corporate governance problems caused by the debtor-in-possession model of Chapter 11 bankruptcy proceedings.

Agency and Law Enforcement Problems in Chapter 11

Corporate governance does not have many advocates in bankruptcy proceedings. In a Chapter 11 action, managers run the company and have to take many heterogeneous interests into account. However, they do not always have incentives to do so. Depending on the circumstances, management relies either on the shareholders or on the influential creditors. The latter – hedge funds, private equity … Read more