The benefits of buying distressed assets

Meier, J-M and Servaes, H (2020) The benefits of buying distressed assets. Journal of Applied Corporate Finance, 32 (4). pp. 105-116. ISSN 1078-1196

Abstract

When companies in financial difficulty are forced to sell assets—especially real assets such as factories, business units, real estate, or the entire company—the news is often seen as negative all around. In these situations, referred to as “fire sales,” companies are forced to sell assets below fair value, and the spillover effects can be costly as well. These spillover costs, or “externalities,” include plant closings and job losses that hurt employees, suppliers, and customers. Fire sales can also depress the values of the assets of healthy companies in the same industry.

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Item Type: Article
Subject Areas: Finance
Additional Information:

© 2020 Wiley. This is the peer reviewed version of the following article: Meier, J-M; Servaes, H: The benefits of buying distressed assets, Journal of Applied Corporate Finance, which has been published in final form at https://doi.org/10.1111/jacf.12436. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions

Date Deposited: 08 Oct 2020 15:03
Date of first compliant deposit: 08 Oct 2020
Subjects: A > Asset valuation
A > Assets
Last Modified: 14 Jun 2021 00:23
URI: https://lbsresearch.london.edu/id/eprint/1495
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