Law Review: Iverson, Madsen, Wang & Xu- Practice Makes Perfect: Judge Experience and Bankruptcy Outcomes

Abstract: Exploiting the within-district random assignment of bankruptcy cases to judges, we provide new evidence on the effects of judges' on-the-bench experience on large public corporate Chapter 11 outcomes. We find that cases assigned to more experienced judges spend less time in bankruptcy, are more likely to be reorganized rather than liquidated, but are not more likely to refile for bankruptcy after emergence. Heterogeneity tests suggest that exposure to a higher percentage of business filings and a greater diversity of business filings accelerates judges' learning curve, and that the effect of judge experience is stronger when the court is busy. In addition, we show that prior judgeship professional experience and personal attributes do not consistently explain case outcomes. Our evidence collectively highlights the importance of specific skills relative to general skills for major corporate bankruptcies and contributes to research on investment in human capital and learning by doing. Commentary: It would be interesting to see what results judicial experience have in consumer cases, particularly Chapter 13. A study looking at length of time confirming plans, rates of confirmation and Chapter 13 discharge would be useful. For a copy of the article , please see: Practice Makes Perfect: Judge Experience and Bankruptcy Outcomes