The resolution of bankruptcy by auction: allocating the residual right of design

• 成果类型: Article
• 署名作者: Bhattacharyya, S; Singh, R
• 署名单位: University of Michigan System; University of Michigan; University of Minnesota System; University of Minnesota Twin Cities
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/S0304-405X(99)00038-0
• 发表日期: 1999
• 页码: 269-294
• 关键词: bankruptcy; auctions; residual rights

摘要

In this paper, we examine the value of the right to choose the method of sale of corporate assets. We show that this right is valuable, and that its value comes from recognizing conflicting incentives of claimants at the time of sale. As with risky projects, senior and junior claimants are shown to have distinct preferences on a set of common auction procedures. They also differ on the issue of allocation of resources towards attracting bidders for the auction. As a consequence, the optimal allocation of the design right must depend on circumstances prevailing at the time of the sale. While, in general, selling the firm by auction does not guarantee the use of optimal selling arrangements, a suitable allocation of design rights may help mitigate inefficiency problems significantly. (C) 1999 Elsevier Science S.A. All rights reserved.