Related Words

Bankruptcy: A form of debt relief, there are two kinds of bankruptcy. Personal bankruptcy: an individual, sole trader or partnership is formally declared bankrupt by the court (ie they cannot pay their . . . View Full Definition

Bankruptcy Cost View: The argument that expected indirect and direct bankruptcy costs offset the other benefits from leverage so that the optimal amount of leverage is less than 100% debt financing.

Prepackaged Bankruptcy: A bankruptcy in which a debtor and its creditors pre-negotiate a plan of reorganization and then file it along with the bankruptcy petition.

Trustee In Bankruptcy: One appointed by a bankruptcy court, and in whom the property of the bankrupt vests. The trustee holds the property in trust, not for the bankrupt, but for the creditors.

Bankruptcy View: The argument that expected bankruptcy costs preclude firms from financing entirely with debt.

Bankruptcy Risk: The risk that a firm will be unable to meet its debt obligations. Also referred to as default or insolvency risk.

Bankruptcy Score: A scoring system to indicate risk of borrower default.

Voluntary Bankruptcy: Arrangement allowing shareholders of a mutual fund to purchase shares over a period of time on a regular basis, and in so doing take advantage of dollar cost averaging.

Legal Bankruptcy: A legal proceeding for liquidating or reorganizing a business.

Discharge Of Bankruptcy: A decrease in book cash but no immediate change in bank cash, generated by checks written by the firm.