Abstract
This paper provides some first evidence on CEO turnover, compensation and corporate performance following bankruptcy auctions, using small-firm data from Sweden. Auction bankruptcy imposes significant costs on CEOs: the median compensation loss is 40% over two years following filing, and two-thirds of CEOs lose their jobs through the auction. There is, however, little evidence that managers delay bankruptcy filing at the detriment of firms' going concern value. The post-bankruptcy operating performance of auctioned firms is typically at par with industry competitors. Overall, the results are consistent with the hypothesis that bankruptcy auctions tend to force turnover of inefficient CEOs. This contrasts with extant evidence on Chapter 11 reorganizations. compensation, post-bankruptcy performance
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