Abstrakt
In the first chapter (joint with Ondřej Knot), we develop a model of a debt contracting problem under bankruptcy regimes differing by a degree of softness. In the second chapter, I document that the recent Czech bankruptcy practice tended to delay the ultimate exit of a firm when it can be expected to have a harsher ex-post effect on the firm's employees.
In the third chapter, I present a dozen elementary ex ante inefficencies of too soft or too tough corporate bankruptcy laws and clusters them in five types - debt contracting (credit rationing, creditor structure, other), project choice (effort choice, risk choice, entrenchment), debtor's bankruptcy decision (strategic default, staving off bankruptcy, gambling on resurrection), creditor's bankruptcy decision (inefficient liquidation) and provision of private information (debtor's incentive to share, creditor's incentive to monitor). I introduce an extension of the simple incomplete contracting framework of Schwartz (2002) as a unifying to illustrate seven of these inefficiencies and, thus, connect several approaches that might seem mutually incoherent.
The chapter may also serve as an introductory textbook on the ex ante (in)efficiency of corporate bankruptcy.