How to Sell a (Bankrupt) Company
38 Pages Posted: 30 Mar 2000
Date Written: May 2000
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 91% 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
JEL Classification: G33, D74
Suggested Citation: Suggested Citation