Working Paper
How to Sell a (Bankrupt) Company
Francesca Cornelli, Leonardo Felli
CESfio, Munich, 2000
CESifo Working Paper No. 292
CESfio, Munich, 2000
CESifo Working Paper No. 292
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 reduce to a minimum the rents that the sale of the company leaves in the hands of the buyer.
Keywords: Bankruptcy, control stakes, auction