A new study by a bankruptcy expert on all types of bankruptcy including chapter 7 bankruptcy has brought forth disturbing findings. Professor Lynn LoPucki from the law school of the University of California, spearheaded the study that is titled “Bankruptcy Fire Sales.” Around 54 large companies that were in the bankruptcy process were covered.

The study revealed the popular trend followed by companies that turned bankrupt was to have competent managers who chose to sell them off at once. The study suggests that instead of pushing through such sales, it would be advisable for creditors and shareholders to double their recoveries by simply getting the company to reorganize rather than sell off.