E1cb will occur if α-carbon adjacent to the halogen atom has hydrogens on it.
The reaction proceeds in an analogous manner to that of the Favorskii rearrangement.
[1] The selectivity is similar to the Favorskii rearrangement in that the most stable carbanion is formed.
The homo-Favorskii rearrangement is a key step in the synthesis of Kelsoene, constructing its four-membered ring.
Therefore, the cyclobutanone intermediate can be isolated and is further reacted to yield the product.