Revenue efficiency and change of control:the case of bankruptcy

The restructuring of a bankrupt company often entails a change of control. By efficiency of a bankruptcy procedure it is usually meant that the control is allocated into the hands of those who can maximize its value. In this paper we focus instead on how to allocate control with a procedure that allows the creditors to maximize their returns. The conclusion is that creditors should be allowed to retain a fraction of the shares of the company.