How to sell a (bankrupt) company

Cornelli, F and Felli, L (2012) How to sell a (bankrupt) company. International Review of Finance, 12 (2). pp. 197-226. ISSN 1369-412X

Abstract

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.