Restructuring under distress: Essays on corporate finance and financial reporting

Following no strict legal or institutional definition, restructurings relate to renegotiations of within the firm - as a nexus of contracts - combined agreements. This cumulative dissertation focuses on renegotiations that are triggered by financial distress and that are conducted with current or potential debt- and shareholders. In form of a literature review, the first manuscript systematizes the bargaining dynamics between existing capital providers and their influence on the choice for in- or out-of-court firm reorganizations in Germany and the United States. How the renegotiations of existing payment obligations are reflected in financial instruments accounting according to the IFRS and the capital structure of the distressed firm is further elaborated in a case-based instructional resource. The second part of the dissertation discusses restructurings through the acquisition of the distressed target. Specifically, the phenomenon of negative goodwill is studied that arises in business combinations with acquisition costs that are lower than the fair value of the targets’ net assets. For the exemplary case of Germany, manuscripts three and four examine the frequency, materiality and reasons for the by the IASB as anomalous acclaimed phenomenon together with investors’ reactions to such transactions.:I. Restructuring Under Distress, Essays on Corporate Finance and Financial Reporting: An Overview 1. Introduction 2. Overview and Findings References II. Capital Structure and the Choice Between In- and Out-of-Court Reorganization: A Literature Review 1. Introduction 2. Theoretical Background on Reorganization Choices 3. Methodology 4. Analysis 5. Research Implications and Discussion 6. Conclusion References III. The Hardest Cycle Climb at TCC: A Financial Instruments Case 1. Case Manuscript 2. Case Guidance 3. Case Solutions References IV. Frequency of and Reasons for Bargain Purchases: Evidence From Germany 1. Introduction 2. Conceptual Background 3. Empirical Evidence 4. Conclusion and Avenues for Future Research References V. Does Underpayment Pay the Acquirer? An Event Study on Bargain Purchases 1. Introduction 2. Conceptual Background 3. Prior Literature 4. Sample Selection 5. Methodology 6. Results 7. Conclusion Reference