The Systematic Auctioning of Insolvent Companies

Insolvency proceedings are important, not only in the current crisis and for actually insolvent companies or such urgently threatened by insolvency, but for all companies, even for potential and not (yet) founded ones, especially in regard of lending. Thus, credits should be treated similarly inside and outside of bankruptcy, therefore a high bankrupt's estate has to be generated and fairly distributed to the creditors. Auctions are well suited to bring this about, as the highest bidder often ensures the most efficient utilisation of the insolvent company as well as the highest possible dividend in bankruptcy for the creditors, who can bid themselves. Thereby some problems are possible, especially by asymmetrical valuations and a lack of bidders, which have to be limited conveniently.