Economic aspects of a business under the reorganization procedure
The paper expresses the fundamental parameters under which it is rational to consider reorganisation of a debtor’s business as a rehabilitative measure for bankruptcy. Special emphasis is then placed on the situation where reorganisation is aimed at liquidation of the business as a real unit insofar as, at the same time, the possibility of bankruptcy utilisation (liquidation methods) in the reverse sense of the word is expressed, i.e. to rehabilitate the debtor’s business (with all the legal consequences which this method has for the debtor, taking into account greater comfort for the creditor in the area of risk).
The core of the work is then an outline of methods which, from the debtor’s perspective, can serve to rationally evaluate the optimal variant to settle the debtor’s bankruptcy.
Conclusions which have been gradually presented show at least some reasons why strengthening reorganisation as the official method for settling bankruptcy has not, nor will it, become a method that is equal in stature alongside liquidation (i.e. bankruptcy) as a solution despite all legislative endeavours. In the bounds of the study, two basic areas in which methods for analysing a business assessing the possibility of debtor rehabilitation will be outlined. It transpires that this is a very specific area for applying these methods; nevertheless, it is at the same time proven that there are relatively simple and effective methods to assess the situation in basic outlines, with an adequate or at least appropriate measure of circumspection and elimination of risks.
Another aspect of insolvency proceedings is thereby uncovered, i.e. the fact that setting legislation, which in numerous situations precludes creditors from gaining adequate control over a debtor’s assets, represents a more substantial impediment for rehabilitative measures than the impossibility of economically assessing the potential success rate thereof.
This paper is one of the outputs of the research project "Insolvency of Companies with Virtual Headquarters" registered at Internal FPH Grant Agency (309025).