The value of the insolvent firm is then distributed to creditors who participate in the bankruptcy procedure according to a priority scheme . Western countries require the debtor and many (sometimes all ) creditors to participate in the state-supplied bankruptcy system and restrict the ability of 4 parties to alter certain outcomes that the state system directs . To appreciate these peculiar bankruptcy features , recall that the typical commercial dispute is resolved by a court but parties can contract for a different dispute...











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