Corporate Financial Distress, Restructuring, and Bankruptcy

EDWARD I. ALTMAN is the Max L. Heine Professor of Finance, Emeritus at New York University, Stern School of Business and Director of the Credit and Fixed Income Research Program at the NYU Salomon Center.EDITH HOTCHKISS is a Professor of Finance at the Carroll School of Management at Boston College. WEI WANG is an Associate Professor and RBC Fellow of Finance, and Director of Master of Finance – Beijing program at the Smith School of Business at Queen’s University, Canada.

• About the Authors ixAcknowledgments xiPreface xiiiPart One The Economic and Legal Framework of Corporate Restructuring and BankruptcyChapter 1 Corporate Financial Distress: Introduction and Statistical Background 3Chapter 2 An Introduction to Leveraged Finance 21Chapter 3 An Overview of the U.S. Bankruptcy Process 39Chapter 4 Restructuring Out-of-Court and the Cost of Financial Distress 71Chapter 5 Valuation of Distressed Firms 91Chapter 6 Corporate Governance in Distressed Firms 117Chapter 7 Bankruptcy Outcomes 135Chapter 8 International Evidence 147Part Two High-Yield Debt, Prediction of Corporate Distress, and Distress InvestingChapter 9 The High-Yield Bond Market: Risks and Returns for Investors and Analysts 165Chapter 10 A 50-Year Retrospective on Credit Risk Models, the Altman Z-Score Family of Models, and Their Applications to Financial Markets and Managerial Strategies 189Chapter 11 Applications of Distress Prediction Models: By External Analysts 217Chapter 12 Distress Prediction Models: Catalysts for Constructive Change-Managing a Financial Turnaround 235Chapter 13 A Bottom-Up Approach to Assessing Sovereign Default Risk 245Chapter 14 The Anatomy of Distressed Debt Markets 265Chapter 15 Investing in Distressed Firm Securities 277Chapter 16 Modeling and Estimating Recovery Rates 295References 315Author Index 335Subject Index 343