The title reaction of 1-carbonyl substituted cyclopropanecarboxylates proceeds under C(1)–C(2) bond cleavage to produce γ-lactones. Stereochemically, the reaction takes two pathways: (1) substrates with a cationstabilizing group like vinyl on C(2) give thermodynamically favored γ-lactones having the thermodynamically more stable arrangement of substituents irrespective of the configuration of the cyclopropane substrates, (2) substrates without such a cation-stabilizing group afford γ-lactones under ca. 70% inversion at C(2) reaction center.