Graduation Year


Date of Submission


Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts



Second Department

Film Studies

Reader 1

Fan Yu

Terms of Use & License Information

Terms of Use for work posted in Scholarship@Claremont.


The empty creditor problem leads investors to believe that creditors will be less likely to renegotiate lending terms due to the ability to invest in credit default swaps. Thus, making the process of bankruptcy less efficient for any company. Additionally, Hedge funds have been shown to improve the outcomes of the processes through empirical studies. In order to learn about the effect of both simultaneously, the paper looks at the recovery rates and outcomes when hedge funds are versus are not present in CDS cases. The findings show that there is a clear negative skew for recovery rates when hedge funds take a creditor position and a CDS market is available.

This thesis is restricted to the Claremont Colleges current faculty, students, and staff.