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How to Sell a (Bankrupt) Company
Author(s) -
Cornelli Francesca,
Felli Leonardo
Publication year - 2012
Publication title -
international review of finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.489
H-Index - 18
eISSN - 1468-2443
pISSN - 1369-412X
DOI - 10.1111/j.1468-2443.2012.01156.x
Subject(s) - bankruptcy , business , economic rent , key (lock) , control (management) , focus (optics) , commerce , industrial organization , finance , economics , microeconomics , management , computer science , computer security , physics , optics
This paper suggests a way to sell a company that maximizes the proceeds from the sale. The key to this proposal is the option left to the seller to retain a fraction of the shares of the company. Indeed, by retaining the minority stake, the seller 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. We then focus on two main applications of this idea: bankruptcy procedures and carve‐outs.