Ravid_520x468Dr. S. Abraham Ravid, Sy Syms Professor of Finance and chair of the finance department at Sy Syms School of Business, was interviewed by NPR’s Marketplace about the differences between Chapter 7 and Chapter 11 bankruptcies.

Unlike the more commonly known Chapter 11, Chapter 7 bankruptcies do not offer organizations any chance for revival. “Chapter 7 is where companies go to die,” said Ravid. “The company disappears. In Chapter 11, everybody gets together — shareholders, management, creditors. Then they decide what to do in order to restructure the company and try to get out of bankruptcy.” But in Chapter 7, the company doesn’t emerge. “The company is worth more dead than alive. There’s no point in keeping a company going when it racks up losses,” Ravid said.

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