We propose a new bankruptcy procedure. Initially, a firm's debts are cancelled, and cash and non-cash bids are solicited for the "new" (all-equity) firm. Former claimants are given shares, or options to buy shares, in the new firm on the basis of absolute priority. Options are exercised once the...

The thesis of this paper is that human capital is inalienable: it cannot be bought or sold. Control of physical capital proved the means by which one agent influences another. That is, the pattern of property rights over physical assets is important in the determination of incentives. Recent...

We are concerned with the design of a constitution for a firm - an ex ante contract which assigns residual rights of control (and possibly residual income rights) without reference to the issue to be decided. We focus attention on two polar constitutions: non-profit cooperatives and outside...

The paper compares co-operative governance structure to outside ownership. The distinction between the two lies in who has residual rights of control. It is found that a co-operative becomes relatively less efficient as the environment becomes more competitive, and the interests of members...

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