Financially distressed firms can gain protection from their creditors while they restructure by filing for protection under US Bankruptcy Codes. In a prepackaged bankruptcy, a firm negotiates a reorganization plan with its creditors prior to filing for bankruptcy.

This can result in a much quicker exit from bankruptcy than traditional bankruptcy filings. Brian Betker conducted a study of 49 prepackaged bankruptcies that were filed between 1986 and 1993 and rcported the results in Financial Management (Spring 1995). The table on page 50 lists the time in bankruptcy (in months) for these 49 companies.The table also lists the results of a vote by each company's board of dircctors concerning their preferred reorganization plan. (Note:

"Joint" = joint exchange offer with prepackaged bankruptcy solicitation; "Prepack" = prepackaged bankruptcy solicitation only; "None" = no pre-filing vote held.)

a. Construct a stem-and-leaf display for the length of time in bankruptcy for all 49 companies.

b. Summarize the information reflected in the stemand-leaf display, part

a. Make a general statement about the length of time in bankruptcy for firms using "prepacks."

c. Select a graphical technique that will permit a comparison of the time-in-bankruptcy distributions for the three types of "prepack" firms: those who held no pre-filing vote; those who voted their preference for a joint solution; and those who voted their preference for a prepack.

d. The companies that were reorganized through a leveraged buyout are identified by an asterisk (*) in the table. Identify these firms on the stem-and-leaf display, part

a, by circling their bankruptcy times. Do you observe any pattern in the graph? Explain.