Bankruptcy as an Auction Process: Lessons from Sweden

The traditional U.S. Chapter 11 bankruptcy process in which financial claims are renegotiated under court protection and the firm continues to operate under existing management has long been criticized by economists as an inefficient way of dealing with financially distressed companies. In this paper, the authors make the case for a mandatory auction bankruptcy system of the kind now used in Sweden—one that requires all companies filing for Chapter 11 to be sold in open auctions soon after the filing. After discussing the notable features of and differences between the U.S. and Swedish bankruptcy systems, the authors summarize recent research (much of it their own) on the benefits and possible drawbacks of the Swedish system. Among the most notable findings of this research, there is no evidence that mandatory bankruptcy auctions in Sweden lead to “fire‐sale” discounts in auction premiums. Moreover, the fact that three‐quarters of the Swedish companies that filed for bankruptcy survived as going concerns should allay concerns that an auction system will produce excessive liquidations. At the same time, the post‐bankruptcy operating profitability of the companies that emerge from Swedish auctions as going concerns tends to be on a par with that of their (non‐bankrupt) industry peers. Such post‐operating performance, when combined with a 75% rate of reorganization (versus liquidation), suggests that allowing auction investors—instead of the bankruptcy court—decide which companies survive and how they get capitalized and restructured has been quite effective in accomplishing the two aims of a bankruptcy system: (1) preserving intact all economically viable enterprises while (2) eliminating the excess capacity that results from prolonging the existence of companies that are never expected to earn high enough returns on capital to attract private investment. Consistent with these findings, the U.S. in recent years has seen a sharp increase in the use of auctions in Chapter 11 bankruptcies, though on a voluntary rather than a mandatory basis. Such a change reflects the growing recognition of the role of auction processes in reducing bankruptcy costs and preserving going‐concern values as U.S. capital market participants push harder for private workouts, “prepackaged” Chapter 11 filings, and auction sales in Chapter 11.     

Unemployment and Crime: Is There a Connection?

A panel of Swedish counties over the years 1988–1999 is used to study the effects of unemployment on property crime rates. The period under study is characterized by turbulence in the labor market—the variation in unemployment rates was unprecedented in the latter part of the century. Hence, the data provide a unique opportunity to examine unemployment effects. According to the theory of economics of crime, increased unemployment rates lead to higher property crime rates. A fixed‐effects model is estimated to investigate this hypothesis. The model includes time‐ and county‐specific effects and a number of economic and socio‐demographic variables to control for unobservables and covariates. The results show that unemployment had a positive and significant effect on some property crimes (burglary, car theft and bike theft).     

What motivates consumers to participate in boycotts: Lessons from the ongoing Canadian seafood boycott

Despite the tremendous growth in consumer boycotts, marketing has paid relatively little attention to consumer boycott motivations. Addressing this deficiency, this study uses netnography to investigate boycott motivations and perceived boycott participation costs by analyzing consumer comments submitted to an online boycott petition. The results show that boycott pledgees explicitly express their desire for the target to abolish its egregious behavior, their anger about the behavior in question, and their desire for punitive actions. Signatories also pledge participation for moral reasons and identify with the cause reflected by the boycott. Boycott motivations also include the belief that consumers have the power to impact the boycott target's bottom line and/or behavior as well as the belief that the boycott will succeed in forcing the target to cease its egregious behavior. Signatories, however, rarely refer to the costs of boycott participation.     

Neck injuries among the elderly in Sweden

Neck injuries are some of the most important injuries as they have the potential to influence the spinal cord. A previous national survey of neck injuries in Sweden revealed that injury incidence was increasing for the population over 65 years of age, although it was decreasing for the population as a whole. The aim of this study was therefore to further clarify the magnitude, severity, and external causes of neck injuries in the elderly people in Sweden. A national incidence study, with focus on the age group above 65 years, was undertaken with data from the injury surveillance program at the Swedish National Board of Health and Welfare. The investigation includes cervical vertebral fractures reported between 1987 and 1999, and cervical soft tissue injuries from 1997 to 1999. Data in the hospital discharge register were reported in ICD9 from 1987 to 1996, while data from 1997 to 1999 were reported in ICD10. During the study period 4168 cervical injuries occurred of which 341 were fatal. People above 65 years of age made up 17% of the population and sustained 30% of all cervical injuries and 43% of all fatal cervical injuries. Half of the cervical injuries were axis (C2) fractures. Lower vertebral fractures occurred in 16% of the cases and atlas (C1) fractures in 11%. The cervical soft tissue injuries amount to 19% of all injuries. Fall accidents account for the majority (71%) of the accidents. There is an increasing trend for fall accidents resulting in neck injuries. The male population has a higher incidence for neck fractures than females, disregarding the external cause of injury. The upper cervical injuries are the most common, have the longest hospital treatments, and seem to be caused mainly by low energy falls. Further research is needed to understand the mechanisms of these injuries and in this aspect engineering could contribute with valuable knowledge, through accident simulations with numerical models. The increasing incidence of fall injuries calls for further preventive actions. The public sector should implement preventive strategies to reduce the number of extrinsic accidents, while the health care sector should focus on preventing intrinsic accidents with individual actions for each patient.     

Community-Value-Marketing — Was Unternehmen von NPO lernen können

Zusammenfassung  Welche Marketingstrategien setzen Non-Profit-Organisationen ein, um ihre Ziele zu erreichen? Bei einer Analyse zeigt sich, dass es hier Wege gibt, die sich auch von profitorientierten Unternehmen umsetzen lassen. Beispielsweise die Marketingstrategie, nicht nur Kunden, sondern auch die sie umgebenden Nicht-Kunden anzusprechen, um auf diese Weise einen erweiterten Kundennutzen zu stiften. Ein zweiter Aspekt ist die Erkenntnis, dass sich Werte am besten über eigenes Erleben vermitteln lassen. Das Beispiel der Hepatha-Stiftung soll dies verdeutlichen. Dipl.-Kulturw., MSc, Karin Kreutzer Wissenschaftliche Mitarbeiterin am Center for Social Enterprise der Universit?t St. Gallen und Leiterin des Coaching-Programms an derselben Universit?t PD Dr. Urs J?ger Managing Director des Center for Social Enterprise der Universit?t St. Gallen und Privatdozent an derselben Universit?t