Contact:
Hartgen
(703) 739-0800
color='#0000ff'>jhartgen@abiworld.org
ABI ENDOWMENT
TO FUND STUDY OF CLAIMS TRADING ASSOCIATED WITH CHAPTER 11
BANKRUPTCIES
size='3'>August 30, 2007, Alexandria, Va.
size='3'>— The American Bankruptcy Institute Endowment Fund has
awarded a $36,900 grant to an international research team examining
claims trading in large chapter 11 cases. The
researchers—Prof.
face='Times New Roman' size='3'>David C. Smith
of the McIntire School of Commerce at the University of
Virginia, Prof. Per Strömberg of the Swedish Institute for
Financial Research and the Stockholm School of Economics, and Tinamarie
Feil of the BMC Group, Inc.—will document the extent to which the
ownership of claims in large bankrupt firms changes hands, and will
attempt to assess the impact that claims ownership has on the outcome of
companies’ bankruptcy status.
“We are thrilled to have
the opportunity to pursue research into this important and timely
subject, and we are honored to be supported in our efforts by the
ABI,” said Smith. “No study has yet documented the extent to
which chapter 11-related claims trading occurs, or how it might
ultimately affect the health of the bankrupt company. It is
fitting that the ABI, as the premier professional organization in the
field of insolvency, will play a key role in shedding light on these
matters.”
The researchers will
investigate a number of fundamental issues associated with claims
trading, seeking to identify the attributes that make certain firms more
likely to experience high levels of such trading, and who the typical
buyers and sellers are in claims trading transactions. They will
also examine whether the trading activities of distressed investors
affect the likelihood of a successful reorganization and if the claims
trading process leads to a redistribution of value among different
claimants.
The primary source for the
researchers will be the records maintained by information management
companies that act as claims administrators in chapter 11 cases. These
companies aid debtors in building and maintaining complete claimant
lists, and help prepare a creditor matrix, assets and liabilities
schedules, and other claimant-related information for their debtor
client. The researchers will also use additional information on large
borrower loan deals to obtain the identities of senior bank claimants
and to gather information on the participants in DIP loans.
Prior to joining
the
face='Times New Roman' size='3'>University
size='3'>of
size='3'>Virginia
size='3'>’s McIntire School of Commerce, Prof. Smith worked as an
economist in the International Finance Division of the Federal Reserve
Board. Prof. Strömberg is a senior research fellow at the
Swedish Institute of Financial Research, as well as associate professor
of Finance at the Stockholm School of Economics and adjunct associate
professor of Finance at the University of Chicago Graduate School of
Business. Feil is a co-founder and president of Legal Services at BMC
Group, an information management company, and has more than 20
years’ experience directing various aspects of corporate
compliance, communications and insolvency
transactions.
The ABI Endowment Fund was
created in 1989 to provide a secure financial base for the Institute and
to provide resources for insolvency research and education. Projects
eligible for Endowment funding include research by individuals or
entities relating to bankruptcy or insolvency; surveys or other
analytical investigation; the education of judges, court personnel,
other governmental personnel and the general public; scholarships or
other educational grants; support for the Robert M. Zinman Resident
Scholar; and support for both the Chief Judge Conrad B. Duberstein
National Bankruptcy Memorial Moot Court Competition and ABI’s
Corporate Restructuring Competition. Since 1998, the Fund has awarded
nearly $750,000 in grants.
###
ABI is the largest multi-disciplinary, nonpartisan organization
dedicated to research and education on matters related to insolvency.
ABI was founded in 1982 to provide Congress and the public with unbiased
analysis of bankruptcy issues. The ABI membership includes more than
11,500 attorneys, accountants, bankers, judges, professors, lenders,
turnaround specialists and other bankruptcy professionals providing a
forum for the exchange of ideas and information. For additional
information on ABI, visit www.abiworld.org. For additional conference
information, visit
href='http://www.abiworld.org/conferences.html'>
color='#0000ff'>http://www.abiworld.org/conferences.html