Auctions in Bankruptcy : Theoretical Analysis and Practical Guidance

In academic circles, there are now a myriad of proposals for reform of Chapter 11 of the U.S. bankruptcy law. Many of these proposals call for the replacement of Chapter 11 with market-oriented alternatives, including in some cases, auction of insolvent, publicly held companies. Auctions in bankruptcy initially drew strong support form leading bankruptcy scholars. Recently though, other scholars have been critical of the case for auctions in bankruptcy. Our main purpose in this paper is to argue that these criticisms are both unwarranted and somewhat off the point