Professional Fees and Other Direct Costs in Chapter 7 Business Liquidations

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Using an empirical analysis from Chapter 7 cases in five judicial districts, this article estimates the direct costs in typical small business Chapter 7s. The article finds that direct costs are lower than commonly portrayed, constituting a mean of 6.1% of total assets of 13.5% of total distributions. Costs did vary substantially across districts. Delay and case complexity were the largest determinant of bankruptcy costs. Most all of the cases involved only a negligible distribution for unsecured creditors.
Original languageEnglish (US)
Pages (from-to)1207-1236
Number of pages28
JournalWashington University Law Quarterly
Issue number3
StatePublished - 1997


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