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How to Sell a (Bankrupt) Company

  • Renée Birgit Adams
  • Francesca Cornelli
  • Leonardo Felli

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.

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Article provided by International Review of Finance Ltd. in its journal International Review of Finance.

Volume (Year): 12 (2012)
Issue (Month): 2 (06)
Pages: 197-226

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Handle: RePEc:bla:irvfin:v:12:y:2012:i:2:p:197-226
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