# kaal:claim:1908473-040

**Claim.** Strategic maneuvering by creditors before a bankruptcy filing or during plan negotiations could distort the incentive structure the sequential trigger proposal depends on.

**Type.** failure  **Support.** argued

**Holds when.**

- Strategic behavior can arise equally at the conversion stage and at the voting rights increase

**Source quote.**

> Strategic maneuvering of creditors prior to filing for bankruptcy protection or during the negotiations leading up to plan confirmation could distort the herein-proposed incentives for constituents.

**From.** Wulf A. Kaal, Christoph Henkel, *Contingent Capital with Sequential Triggers* (2011), VI. QUASI-PREPARATION STAGE BEFORE BANKRUPTCY, page 48

**Cite as.** Wulf A. Kaal, Christoph Henkel, Contingent Capital with Sequential Triggers (2011). SSRN: https://ssrn.com/abstract=1908473

**Verify.** sha256 of source PDF `9d578dac663357529edd1f6453fcfe69bdc59ac882408d9edfde5a4c2916befa` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20and%20Henkel%20-%202011%20-%20Contingent%20Capital%20with%20Sequential%20Triggers.pdf

**Failure mode.** strategic-maneuvering-distortion  (family: trigger-design-failure)

**Topics.** risk-and-incentives, contingent-capital

**Keywords.** strategic-behavior, creditor-incentives, reorganization, sequential-triggers

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