Bankruptcy as an Auction Process: Lessons from Sweden
The traditional U.S. Chapter 11 bankruptcy process in which financial claims are renegotiated under court protection and the firm continues to operate under existing management has long been criticized by economists as an inefficient way of dealing with financially distressed companies. In this paper, the authors make the case for a mandatory auction bankruptcy system of the kind now used in Sweden-one that requires all companies filing for Chapter 11 to be sold in open auctions soon after the filing. Copyright Copyright (c) 2009 Morgan Stanley.
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Volume (Year): 21 (2009)
Issue (Month): 3 ()
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