co-author: Leonardo Felli, (London School of Economics).
status: Working Paper.
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 reduce to a minimum the rents that the sale of the company leaves in the hands of the buyer. Download a 600DPI postscript file and a PDF file of this paper.