Lambrecht, Bart, William Perraudin, "Creditor Races and Contingent Claims", European Economic Review, Vol. 40, No. 3–5, (April 1996), pp. 897-907.
Abstract: Recent research has begun the task of integrating contingent claims analysis with modern corporate finance by incorporating strategic behaviour in dynamic models of corporate security valuation. This paper reports on and illustrates these developments by presenting a simple pricing model in which two debt-holders with incomplete information about each other's type decide when to foreclose on a financially-distressed firm.
Keywords: Foreclosure, Debt valuation, Contingent claims, Preemption.