The Creditors' Financial Reorganization Decision: New Evidence from Canadian Data

The paper examines a data set of 338 randomly selected financial reorganization plans filed in Canada during the period 1978-87. Creditors reject roughly 25% of reorganization plans, while about 20% of the plans creditors accept fail before completion, providing evidence of filtering failure in the reorganization process. A logit model of the creditors' reorganization decision produces two interesting results. Plans offering a high proportion of cash payments are more likely to be accepted by creditors, which we interpret as evidence that cash is a signal of financial viability. Plans with high ratios of secured debt are more likely to be accepted, which we interpret as evidence that secured creditors with insider knowledge signal information about the financial viability of firms to unsecured creditors. Ce document a pour but d'étudier le processus de réorganisation financière au Canada sur la base d'un échantillon de 338 propositions de réorganisations commerciales au cours de la période 1978-1987. Les données démontrent que 25 % des propositions sont rejetées par les créanciers non-garantis et qu'environ 20 % des propositions acceptées résultent éventuellement en un échec. Une analyse du comportement des créanciers lors du vote sur une proposition génère deux résultats intéressants. Premièrement, la probabilité d'acceptation d'une proposition augmente avec la proportion des paiements comptants fait aux créanciers. L'utilisation de paiements comptants est interprêtée comme un signal quand à la viabilité d'une firme. Deuxièmement, la probabilité d'acceptation d'une proposition augmente avec la proportion des créances garanties à l'intérieur de la firme. Ce résultat supporte la thèse à l'effet que les banques possèdent de l'information privilégiée sur la viabilité des entreprises et fournit une nouvelle évidence quant au rôle des banques dans la transmission de cette information vers les créanciers non-garantis.Financial reorganization; Creditors; Financial viability of firms, Réorganisation financière ; Créanciers ; Viabilité des entreprises

Should We Abolish Chapter 11 : Evidence from Canada

Over the last decade, Chapter 11 has been the brunt of serious criticism. Some American jurists arguing in favor of revising Chapter 11 have raised the possibility that the Canadian reorganization system might be a good alternative to the existing U.S. system. This article argues that there are fruitful lessons to be learned from the Canadian experience with court-supervised reorganization. Canadian evidence shows that acceptance, confirmation, and consummation rates of proposals are very high. Moreover, firms reorganizing in Canada are almost ten times more likely to survive reorganization than their American counterparts. Furthermore, Canadian data yield no support for the claim that problems with bankruptcy law result from an over-abundance of small firms in reorganization. The analysis also shows that the Canadian reorganization procedure offers a very rapid solution to financial distress and that creditors gain, in expected value terms, from reorganization over liquidation. Based on our evaluation of the relative performance of both systems, we argue that Chapter 11 be revised rather than repealed. Au cours de la dernière décennie, le Chapitre 11 du U.S. Bankruptcy Code a été l'objet de critiques importantes de la part de juristes et d'économistes américains. Récemment, un certain nombre de ces juristes ont soulevé la possibilité de réformer le Chapitre 11 sur la base du système canadien en matière de réorganisation commerciale. Le but du présent article est de démontrer que l'expérience canadienne en matière de réorganisation commerciale est révélatrice sur les réformes potentielles à apporter au Chapitre 11. Les données canadiennes montrent clairement que les taux d'acceptation, de confirmation et de succès des propositions commerciales sont très élevés. De plus, la probabilité de survie des firmes canadiennes en réorganisation est de dix fois supérieure à celle des firmes américaines. Les données canadiennes permettent également de rejeter l'affirmation selon laquelle l'échec de la procédure de réorganisation origine de son utilisation par les petites entreprises. Qui plus est, la procédure canadienne offre une solution rapide aux entreprises en difficultés financières et un rendement espéré aux créanciers supérieur par rapport à la procédure de liquidation. Sur la base de notre évaluation comparative des deux systèmes d'insolvabilité, nous suggérons la révision plutôt que l'abolition du Chapitre 11.Bankruptcy, Reorganization, Chapter 11, Bankruptcy Act, Faillite, Réorganisation, Chapitre 11, Loi sur la faillite

Inelastic neutron scattering signal from deconfined spinons in a fractionalized antiferromagnet

We calculate the contribution of deconfined spinons to inelastic neutron scattering (INS) in the fractionalized antiferromagnet (AF*), introduced elsewhere. We find that the presence of free spin-1/2 charge-less excitations leads to a continuum INS signal above the Neel gap. This signal is found above and in addition to the usual spin-1 magnon signal, which to lowest order is the same as in the more conventional confined antiferromagnet. We calculate the relative weights of these two signals and find that the spinons contribute to the longitudinal response, where the magnon signal is absent to lowest order. Possible higher-order effects of interactions between magnons and spinons in the AF* phase are also discussed.Comment: 9 page

Screening in Ionic Systems: Simulations for the Lebowitz Length

Simulations of the Lebowitz length, $\xi_{\text{L}}(T,\rho)$, are reported for t he restricted primitive model hard-core (diameter $a$) 1:1 electrolyte for densi ties $\rho\lesssim 4\rho_c$ and $T_c \lesssim T \lesssim 40T_c$. Finite-size eff ects are elucidated for the charge fluctuations in various subdomains that serve to evaluate $\xi_{\text{L}}$. On extrapolation to the bulk limit for $T\gtrsim 10T_c$ the low-density expansions (Bekiranov and Fisher, 1998) are seen to fail badly when $\rho > {1/10}\rho_c$ (with $\rho_c a^3 \simeq 0.08$). At highe r densities $\xi_{\text{L}}$ rises above the Debye length, \xi_{\text{D}} \prop to \sqrt{T/\rho}, by 10-30% (upto $\rho\simeq 1.3\rho_c$); the variation is portrayed fairly well by generalized Debye-H\"{u}ckel theory (Lee and Fisher, 19 96). On approaching criticality at fixed $\rho$ or fixed $T$, $\xi_{\text{L}}(T, \rho)$ remains finite with $\xi_{\text{L}}^c \simeq 0.30 a \simeq 1.3 \xi_{\text {D}}^c$ but displays a weak entropy-like singularity.Comment: 4 pages 5 figure

The joy of vacuuming? How the user experience affects vacuum cleaner longevity

An apparent reduction in the average lifetime of vacuum cleaners is explored in this paper in relation to their perceived usability and increasingly frequent product replacement. Motivations for product disposal combine perceived and real product failure with a perceived or real improved product offer. From an historical perspective, vacuum cleaners typify this pattern, continually offering a ‘cheaper and improved’ product. Vacuum cleaner manufacturers reinvigorate the sense of satisfaction and revulsion associated with extracting dirt from our homes through new performance focused product development. For example, increased motor power, filtration, bag-less machines and clear bin compartments have all acted as sales drivers, whilst cost effective materials and offshore and more efficient manufacturing have reduced purchase prices. The latter, cost-driven, processes can create machines that are more likely to be functionally and aesthetically damaged in use, reinforcing the trend for faster replacement. The market appears likely to continue to focus on improved user experience, with growth in market share for lighter weight cordless battery powered machines posing the risk of an increased environmental burden. Drawing from qualitative and quantitative research undertaken for a study for Defra, we explore the user’s relationship to the product, investigating the frustrations and joys of vacuum cleaner use and ownership. The findings illustrate that the revulsion and attraction of cleaning, as well as the tedium and satisfaction fostered by the product, have direct implications for vacuum cleaner longevity

The relationship between ideas about cleanliness and actions that affect product longevity

As Mary Douglas famously put it, ‘where there is dirt there is system’ (1991 (1966): 35). She was concerned particularly with the cultural systems that determine the ideas about dirt that motivate and constrain people’s actions with material objects. This paper assumes that such motivations and constraints may affect consumers’ willingness to keep or to dispose of their possessions, and therefore have an impact on product longevity. It reports on ongoing empirical research using product analysis, ethnographic interviews, a questionnaire and student design work into the possibility of increasing the longevity of vacuum cleaners by design interventions. Because its object of study is a cleaning product used in everyday cleaning practices, the research naturally connects with Douglas’ ideas as well as more recent work such as Dant 2003 that focuses on how people deal practically with the materiality of dirt, not determined by cultural categories. This paper builds on Vaussard et al.’s (2014) classification of individuals by their degree of concern for keeping their house clean, into ‘Spartan’, ‘Minimalistic’, ‘Caring’ and ‘Committed’ cleaners and their implications for vacuum cleaner replacement. Introducing a short history of concern about dirt since germ theory, it considers whether the desire for a more up to date/efficient/powerful/good looking/clean/shiny machine may accelerate replacement. It finally considers whether a design that ‘ages gracefully’ might have a longer life-span, either as a personal possession or as part of a service system

What is broken? Expected lifetime, perception of brokenness and attitude towards maintenance and repair

This paper addresses the discrepancy between the expected and actual lifetimes of vacuum cleaners considering perceived ‘brokenness’ as a driver for replacement. Among electrical products, vacuum cleaners have a high rate of domestic ownership in the UK. They also embody large quantities of greenhouse gases which could be reduced by increasing their longevity and resource efficiency (Schreiber et al., 2012). A focus on energy efficiency has only shown limited or even negative results, therefore to meet recent European Union regulations on durability requirements a focus on product longevity is needed. Around one half of new vacuum cleaner purchasers replace one less than 5 years old, below the expected lifespan, with perceived breakage, poor performance and unreliability as the major reasons for replacement. Their relative simplicity could allow vacuum cleaners to last for significantly longer. The nature of the common causes of failure is known, including stretched cords or blockages, and WRAP has developed guidelines for product improvements. However, many working or repairable machines are disposed of because they are perceived to be ‘irremediably’ broken