How to sell a (bankrupt) company?

Cornelli, Francesca and Felli, Leonardo (2010) How to sell a (bankrupt) company? 2881. Centre for Economic Policy Research, London, UK. (Unpublished)

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Abstract

The restructuring of a bankrupt company often entails the sale of such company. 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.

Item Type:	Monograph (Discussion Paper)
Official URL:	http://www.cepr.org/
Additional Information:	© 2010 Francesca Cornelli and Leonardo Felli
Library of Congress subject classification:	H Social Sciences > HG Finance
Journal of Economic Literature Classification System:	G - Financial Economics > G3 - Corporate Finance and Governance > G33 - Bankruptcy; Liquidation D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D82 - Asymmetric and Private Information G - Financial Economics > G3 - Corporate Finance and Governance > G32 - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure D - Microeconomics > D4 - Market Structure and Pricing > D44 - Auctions
Sets:	Research centres and groups > Financial Markets Group (FMG) Collections > Economists Online Departments > Economics Research centres and groups > Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD) Collections > LSE Financial Markets Group (FMG) Working Papers
Identification Number:	2881
Date Deposited:	07 May 2008 10:53
URL:	http://eprints.lse.ac.uk/4685/

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