3 ms·
you need a lot more than 2 bidders for the theory to hold. Repeating the auction just seems pointless, but another avenue could be for the assets to not be sold
by iav 2y ago
you need a lot more than 2 bidders for the theory to hold. Repeating the auction just seems pointless, but another avenue could be for the assets to not be sold, and the claimants to receive 100% of the equity of the business. Then over time they can potentially see a better recovery than what they are getting from a sale.
- JumpCrisscross 2y ago> you need a lot more than 2 bidders for the theory to hold Wrong. Vickrey auctions are well studied in single-item auctions even with two bidders [1]. (They perform between 4/3 and 2 compared to an optimal omniscient auction. Not solved. But not unstudied.) > claimants to receive 100% of the equity of the business This is Chapter 7. The bankruptcy estate already legally owns the asset, not Jones. [1] https://www.timroughgarden.org/papers/bk.pdf https://www.timroughgarden.org/papers/bk.pdf Examples 4.6 and 5.2
- amyames 2y agoThe trustee gets something like 3% over $1million in liquidated assets. Call it 52,000 from the onion sale. well now someone says I could have bought it for 10 million. trustee now gets $300,000. They’re not going to get in the way.
- JumpCrisscross 2y agoWhy do you think this is relevant? (Everyone is ostensibly trying to maximise the price.)