European Journal of Law and Economics

, Volume 47, Issue 1, pp 89–123 | Cite as

Corporate insolvency procedures in England: the uneasy case for liquidations

  • Régis BlazyEmail author
  • Nirjhar Nigam


Our paper investigates a comprehensive sample of 574 English corporate insolvency cases, including direct liquidation cases. In contrast to other insolvency procedures, liquidations perform poorly on average and fail to produce satisfactory repayments to creditors. We run multinomial Logit regressions to explain the choice between liquidation and reorganization. We obtain three main results. First, we confirm that size matters: distressed firms owning low assets have higher chances of being liquidated immediately. Second, the presence of secured creditors decreases the risk of direct liquidation. This provides a clue that in England, the most-informed creditors adapt their strategies and turn away from the less-performing procedures. Third, we find that the likelihood of administration—which appears nowadays as the main alternative to direct liquidation—significantly depends on the proportion of fixed/current assets owned by the firms.


Liquidation Reorganization Receivership Administration Corporate insolvency England 

JEL Classifications

G33 G38 K20 K22 



Agence Nationale de la Recherche (ANR) financed this research (EURODEF program: We are grateful to the journal’s referees. Any remaining errors are ours.


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Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2018

Authors and Affiliations

  1. 1.EM Strasbourg Business School, IEP Strasbourg, LARGEStrasbourgFrance
  2. 2.ICN Business School, CEREFIGE and LARGEMetzFrance

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