Corporate reorganizations and non-cash auctions
Publication
, Journal Article
Rhodes-Kropf, M; Viswanathan, S
Published in: Journal of Finance
January 1, 2000
This paper extends the theory of non-cash auctions by considering the revenue and efficiency of using different securities. Research on bankruptcy and privatization suggests using non-cash auctions to increase cash-constrained bidder participation. We examine this proposal and demonstrate that securities may lead to higher revenue. However, bidders pool unless bids include debt, which results in possible repossession by the seller. This suggests all-equity outcomes are unlikely and explains the high debt of reorganized firms. Securities also inefficiently determine bidders' incentive contracts and the firm's capital structure. Therefore, we recommend a new cash auction for an incentive contract.
Duke Scholars
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Published In
Journal of Finance
DOI
ISSN
0022-1082
Publication Date
January 1, 2000
Volume
55
Issue
4
Start / End Page
1807 / 1849
Related Subject Headings
- Finance
- 3801 Applied economics
- 3502 Banking, finance and investment
- 1502 Banking, Finance and Investment
Citation
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Chicago
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Rhodes-Kropf, M., & Viswanathan, S. (2000). Corporate reorganizations and non-cash auctions. Journal of Finance, 55(4), 1807–1849. https://doi.org/10.1111/0022-1082.00269
Rhodes-Kropf, M., and S. Viswanathan. “Corporate reorganizations and non-cash auctions.” Journal of Finance 55, no. 4 (January 1, 2000): 1807–49. https://doi.org/10.1111/0022-1082.00269.
Rhodes-Kropf M, Viswanathan S. Corporate reorganizations and non-cash auctions. Journal of Finance. 2000 Jan 1;55(4):1807–49.
Rhodes-Kropf, M., and S. Viswanathan. “Corporate reorganizations and non-cash auctions.” Journal of Finance, vol. 55, no. 4, Jan. 2000, pp. 1807–49. Scopus, doi:10.1111/0022-1082.00269.
Rhodes-Kropf M, Viswanathan S. Corporate reorganizations and non-cash auctions. Journal of Finance. 2000 Jan 1;55(4):1807–1849.
Published In
Journal of Finance
DOI
ISSN
0022-1082
Publication Date
January 1, 2000
Volume
55
Issue
4
Start / End Page
1807 / 1849
Related Subject Headings
- Finance
- 3801 Applied economics
- 3502 Banking, finance and investment
- 1502 Banking, Finance and Investment