Jared Ellias on Bankruptcy Directors

Jared Ellias, professor of law at Harvard University, joins the Business Scholarship Podcast to discuss his article The Rise of Bankruptcy Directors, which he co-authored with Ehud Kamar and Kobi Kastiel of Tel Aviv University. In this article Ellias and his co-authors present an empirical study of the rise of independent directors—traditionally a corporate-law concept—in Chapter 11 bankruptcies. The study finds that although “bankruptcy directors” may be presented as neutral experts who help maximize creditor recoveries, their appointments are associated with on average 20% reductions in unsecured-creditor recoveries.