The effect of bankruptcy reform on the number of corporate reorganization proposals

One of the major aims of the 1992 reform to bankruptcy law in Canada was to increase the number of commercial reorganization proposals. The purpose of this paper is to analyze the number of reorganization proposals filed by companies in Toronto and Montreal before and after bankruptcy reform to see whether the reform has had its intended effect. Controlling for a variety of macroeconomic and policy factors that also influence the number of reorganization proposals, we find that bankruptcy reform has significantly increased the number of corporate reorganization proposals filed in Toronto and Montreal.