The topic of this thesis is to compare the effects of bankruptcy and reorganization. In 2008, the new Insolvency Act come in force, which should facilitate the reorganization of companies i.e., maintaining their operation with the same or similar production program, or range of offered services. The intention of this work is to evaluate the effect of the practice of law in a few specific cases. The aim of analysis of these examples was to determine whether borrowers use this new option of the solution of bankruptcy or why reorganizations do not take place more.

Some of the largest United States bankruptcies of publicly-traded non-financial firms have occurred within the last decade. The continuing need to improve bankruptcy prediction has generated numerous research studies utilizing various prediction models. The purpose of this study is to test the usefulness of the multiple discriminant, probit, and artificial neural network (ANN) models in predicting bankruptcy in the United States textile-related industry. Financial data is examined for 47 bankrupt and 104 non-bankrupt publicly-traded firms in the textile-related industry during the time period 1998-2004, which includes the events of the Asian currency crisis and increased competition from China. Models developed by Altman (1968), Altman (1983), Zmijewski (1984) are compared to ANNs based upon each of these models. A comparison to an ANN including all of the ratios of the previous models and variables for firm size and domestic sales is also made. The Altman (1968) model and ANN 68 model are found to have the higher predictive power for one and two years prior to bankruptcy, respectively, for bankrupt firms. The ANN 84 model and the ANN 83 model have the highest correct classification results for nonbankrupt firms for the entire time period. Solvency and leverage variables appear to have the most impact on the bankruptcy prediction of textile-related firms. The additional variables of firm size and domestic sales are not found to improve the predictive accuracy. This study supports the continued use of the original Altman (1968) model for predicting bankruptcy in a manufacturing industry. Simultaneous utilization of the ANN 83 model to predict nonbankrupt firms is also suggested since the majority of the Altman (1968) variables can be used and the higher potential for improved predictability. This study may be extended to years after 2004 with consideration given to quarterly information, NAICs codes, and leverage variable alternatives.

Abstract Background - Bankruptcy is an issue that not only affects the company that is registered as bankrupt, but also the society since it has an impact on the economy. Previous studies have been focusing on larger listed companies outside of Sweden hence there is a lack of empirical findings about Swedish companies in this research area. Small and medium companies represent most of the Sweden's labor force and therefore the bankruptcy issue is important to investigate for these companies. Purpose - The purpose of the thesis is to find out which financial information distinguishes bankrupt from non-bankrupt companies in Sweden. In other words, which financial ratios have predictive power on bankruptcy. Furthermore, the thesis wants to provide knowledge towards current and future companies so that they can avoid bankruptcy by paying attention to the ratios distinguished in the thesis and keeping the ratios at an acceptable level. Method – The thesis conducts the research with a quantitative strategy by observing financial information from companies’ annual reports. The logistic regression model is used to test for the 11 ratios, by matching two samples; bankrupt and non-bankrupt companies, as well as a classification matrix, Pearson correlation matrix and variance inflation factor. The bankrupt companies selected, are classified as bankrupt for the period 2016-2019. The thesis implements a deductive approach to establish expectation and deduct which financial ratios are predictive. Conclusion - The thesis ends up with 92 companies, where 46 are bankrupt and 46 are nonbankrupt. Out of the 11 ratios, three are statistically significant and have predictive power on bankruptcy. These three are; debt rate, gross profit margin and, cash and cash equivalents. The debt rate has a positive effect on bankruptcy, which means that a higher debt rate increases the risk of bankruptcy. Gross profit margin and cash and cash equivalents have a negative effect on bankruptcy; as they increase, the risk of bankruptcy decreases.

L’étude de l’histoire de la faillite de ses origines romaines à sa disparition en 1985 témoigne de l'instrumentalisation de l'humiliation par le droit. Le commerçant incapable d’honorer ses engagements même sans avoir commis de fraude représente un danger pour l’ordre social et une nuisance pour ses créanciers. Un danger qu’il faut neutraliser par tous les moyens. L’humiliation parait alors la meilleure voie pour assurer la visibilité et l’exclusion du commerçant défaillant. Cette stigmatisation protéiforme s’adapte à l’évolution de la société pour imprimer à la faillite la honte qui s’y attache. D’abord imposée et organisée par le droit elle s’émancipe peu à peu du circuit légal. Lorsque le droit consacre explicitement l’innocence du failli la société continue de faire de lui un paria. Un coup de maître juridique puisque l'institutionnalisation d'une répression de la défaillance aux origines de notre civilisation n'est plus dépendante du droit mais de la société. / Studying the history of bankrupcy, from its origins in ancient Rome to its disappearance in 1985, reveals how the law instrumentalized humiliation. A trader who proves unable to honor his commitments, even if he did not engage in fraud, is a threat to the social order and a liability to his creditors. This danger must be neutralized by any means. Humiliation thus appears as the best way to flag and exclude the failing trader. This protean stigmatisation adapts to the evolution of society to establish the link between bankrupcy and shame. It was, at first, imposed and organised by justice, but it progressively emancipates from the legal apparatus. Even after the law explicitly acknowledged the innocence of bankrupt individuals, society kept casting them out. This judicial master stroke majes the institutionalisation of the repression of bankrupcy that exists since the origins of our civilization no longer relies on justice, but on society. Bankrupcy has disappeared from the Codes, but the concept still exists in citizens' minds, and the stigma it occasionates remains just as powerful. Reforms cannot single-handedly erase the secular stigmatisation of bankrupcy, which deeply impregnates mentalities. At this point, it seems as though we have to acknowledge failure: would it be that it is impossible to erase the stigmatisation of an innocent CEO but incapable of paying back his creditors. Asopting a historical perspective shows that the constant and progressive move towards more leniency from a judicial point of view is a worn-out solution. In order to obtain new results, the methods need to be reexamined.

Substantive consequences of insolvency of an obligor for his business partners Abstract This thesis has a goal to describe substantive consequences of insolvency or bankruptcy of an obligor for his business partners. This goal is achieved by a comparison of norms influencing the insolvency proceedings arising from the Act no. 182/2006 Coll., about bankruptcy and methods of its solution (Insolvency Act), with the general norms of obligation law, while using academic literature, case law and legislation. The thesis describes especially single consequences which arise directly from the Insolvency Act and the purpose of these consequences. Additionally, possibilities for the business partners are included regarding avoidance of some of the consequences that might negatively affect them. Particularly, the thesis focuses on existence, extinguishment and enforceability of receivables of obligor's business partners. The text is divided into three chapters. The first chapter describes basic principles of the insolvency proceedings, which helps to understand the meaning and the purpose of the legislation pertinent to the insolvency proceedings. These principles are also interpretation rules for the Insolvency Act. Furthermore, individual phases of the insolvency proceedings are described in the first chapter of the...

When filing for personal bankruptcy, an individual can, in almost all cases, claim an exemption for retirement assets.  Using the Survey of Consumer Finances from 2007 and 2010, we test the theory that highly educated or financially sophisticated households allocate more resources to retirement assets under conditions of higher probability of filing for personal bankruptcy.  This hypothesis stems from the concept of asset sheltering, in which an individual will demonstrate a preference for assets that are exempt from a particular risk. To address our hypothesis, we run a Heckman model on the Survey of Consumer Finances data.  Our results provide evidence to match our theory for only highly educated or financially sophisticated individuals, conditional on owning retirement assets.  That is, we observe highly educated and financially sophisticated households allocate more resources to retirement accounts when they are at higher risk for bankruptcy.  Other characteristic groups do not demonstrate a similarly strong relationship between the probability of filing for bankruptcy and the level of retirement assets. / Master of Science

The Position and Application of Claims of the Secured Creditor in Insolvency Proceedings Abstract The topic of this thesis is the position and application of claims of the secured creditor within the special and to some extent independent type of civil court proceedings, which is insolvency proceedings. The object of insolvency proceedings is the bankruptcy or imminent bankruptcy of the debtor and the method of its resolution. It is more than clear, that the creditors who are involved in this proceedings have an interest in ensuring that their claim is satisfied as much as possible. The aim of the paper, as its name itself suggests, is not a general description of the course of insolvency proceedings, but a comprehensive analysis of the position and application of claims of the secured creditors. In the insolvency law, we understand the concept of secured creditor somewhat more narrowly compared to the general substantive law, which is based on the Civil Code. Indeed, the Insolvency Act defines who is deemed to be a secured creditor for the purposes of insolvency proceedings, and this definition does not include all types of security institutes known to us from substantive law. When examining the issue, I proceed from the relevant legal regulations, relevant case law of the higher courts of the Czech...

Reorganization under insolvency law Abstract The goal of this diploma thesis "Reorganization under insolvency law" is to provide coherent description of the most important legal institutes of reorganization, which is non-liquidation form of solution of bankruptcy and analysis of these institutes. Reorganization is regulated by the Act. No. 182/2006 Coll, on insolvency and modes of its solutions. The thesis is divided into two parts that are further divided into chapters and subchapters. The first part describes institutes of insolvency proceedings that are common to all forms of solution of bankruptcy with focus on reorganization. This part is divided into five chapters that describe initiation of insolvency proceedings, bankruptcy, content and essentials of motion on insolvency, effects of initiating insolvency proceedings and consideration of motion on insolvency and court decision about it. The second part contains analysis of the reorganization from its start to its end. This part is divided into eight chapters which explain institutes of reorganization in detail. First and second chapter provide a definition of the reorganization and admissibility of reorganization as defined by law. Third and fourth chapter describe motion on permission of reorganization and the method of its approving by creditors...

Insolvency administrator and his role in insolvency proceedings Abstract The thesis deals with the professional requirements for an insolvency administrator and his status and activities in the insolvency proceedings. Considering the frequent amendments of the legislation regulating insolvency proceedings, including the rights and obligations of the insolvency administrator, this is a particularly relevant topic. The aim of the thesis is to provide a comprehensive overview of the conditions which must be met to become an insolvency administrator, what role the insolvency administrator performs in insolvency proceedings and what are his most important rights and obligations. The thesis is divided into six chapters. The first chapter deals with legal regulations governing the status and activities of the insolvency administrator and includes, in particular, two fundamental acts and their implementing decrees. The second chapter addresses the person of the insolvency administrator from a professional perspective, that is to say, what are the preconditions for obtaining permission to practise as an insolvency administrator and under what conditions the authorisation to practise ceases. Furthermore, the chapter covers the area of the list of insolvency administrators and the way in which insolvency...

Bankruptcy is a highly significant worldwide problem with high social costs. Traditional bankruptcy risk models have been criticized for falling short with respect to bankruptcy theory building due to either modeling assumptions or model complexity. Genetic programming minimizes the amount of a priori structure that is associated with traditional functional forms and statistical selection procedures, but still produces easily understandable and implementable models. Genetic programming was used to analyze 28 potential bankruptcy variables found to be significant in multiple prior research studies, including 10 fraud risk factors. Data was taken from a sample of 422 bankrupt and non-bankrupt Norwegian companies for the period 1993-1998. Six variables were determined to be significant. A genetic programming model was developed for the six variables from an expanded sample of 1136 bankrupt and non-bankrupt Norwegian companies. The model was 81% accurate on a validation sample, slightly better than prior genetic programming research on US public companies, and statistically significantly better than the 77% accuracy of a traditional logit model developed using the same variables and data. The most significant variable in the final model was the prior auditor opinion, thus validating the information value of the auditor's report. The model provides insight into the complex interaction of bankruptcy related factors, especially the effect of company size. The results suggest that accounting information, including the auditor's evaluation of it, is more important for larger than smaller firms. It also suggests that for small firms the most important information is liquidity and non-accounting information. The genetic programming model relationships developed in this study also support prior bankruptcy research, including the finding that company size decreases bankruptcy risk when profits are positive. It also confirms that very high profit levels are associated with increased bankruptcy risk even for large companies an association that may be reflecting the potential for management to be "Cooking the Books".