TITLE

Corporate Bankruptcy and Job Losses Among Top Level Managers

AUTHOR(S)
Ang, James S.; Chua, Jess H.
PUB. DATE
December 1981
SOURCE
Financial Management (1972);Winter81, Vol. 10 Issue 5, p70
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
This article presents data that would give indications of job losses among top level managers after bankruptcy. The study shows that preventing liquidation may be the most effective action that managers could take to protect their careers. Although most managers included in this study eventually left their jobs, top executives in successfully reorganized companies fared much better than those in companies that failed. While this is to be expected for the long run, since nobody can continue to work for firms that no longer exist, it was so even in the short run when it would not be known whether reorganization would be successful or not. The data presented here indicate that most top level managers lose their jobs after a firm files for bankruptcy. They also show that more managers were able to retain their positions when firms were successfully reorganized. Unfortunately, the authors are unable to determine the losses of managers in monetary terms, so a conclusive comparison with bankruptcy costs to suppliers of capital is impossible. The extent of job losses indicated by the data suggests, however, that bankruptcy costs to managers are most likely greater than those for the diversified investor.
ACCESSION #
5031717

 

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