How to Sell a (Bankrupt) Company?

Leonardo Felli and Francesca Cornelli

No 2881, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: The restructuring of a bankrupt company often entails its sale. This Paper suggests a way to sell the company that maximizes the creditors' proceeds. The key to this proposal is the option left to the creditors to retain a fraction of the shares of the company. Indeed, by retaining the minority stake, creditors can transfer the control of the company while reducing to a minimum the rents that the sale of the company leaves in the hands of the buyer.

Keywords: Bankruptcy; Auctions; Transfer of control; Private benefits (search for similar items in EconPapers)
JEL-codes: D44 D82 G32 G33 (search for similar items in EconPapers)
Date: 2001-07
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Related works:
Journal Article: How to Sell a (Bankrupt) Company (2012)
Working Paper: How to sell a (bankrupt) company? (2010)
Working Paper: How to Sell a (Bankrupt) Company (2000)
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