Direct Bankruptcy Costs: Evidence from the Trucking Industry |
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| Authors: | Daryl M. Guffey William T. Moore |
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| Affiliation: | Louisiana State University, Baton Rouge, LA 70803.;University of South Carolina, Columbia, SC 29208. The authors express appreciation to Rod Roenfeldt, for numerous helpful comments and suggestions, and to Roy Brooks, Tim Koch, Steve Mann, Ron Rogers, and Neil Sicherman for beneficial suggestions. Two anonymous reviewers offered detailed criticisms and suggestions for which we are most grateful. We thank Harriet Bradham and Michele Bergen for expert editing and administrative support. |
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| Abstract: | Direct costs of bankruptcy are measured for a sample of firms in the trucking industry that petitioned for bankruptcy protection from 1970 to 1985. Average direct bankruptcy costs represent 9.12 percent of the book value of total assets as of the year before filing. These costs are large compared with those reported in prior studies: 3.39 percent of book value of assets for retail firms, 4.31 percent for industrials, and .53 percent for railroads. We also find evidence of substantial economies of scale in bankruptcy costs in the trucking sample. |
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