Business rescue is still in its infancy stage in South Africa, with the introduction of Chapter 6 of the Companies Act 71 in 2008 that took effect in mid-2011. To date the success rate has been dismal and value has been eroded as many companies opt to file for business rescue, but shouldn’t. The objective of this research is to determine glaring attributes that would require extensive consideration before filing for business rescue. These facets should be considered in the pre-assessment stage and should be given the due respect to ensure the organisation has a fighting chance at survival. Business rescue is becoming a tarnished industry within South Africa as a few business rescue practitioners are enriching themselves at the expense of the unexperienced creditors to this new piece of legislation that is designed to help facilitate a turnaround, whilst under the protection of the legal system. This in turn, will help to preserve, not only ailing businesses and their communal value, but the mere jobs of each individual within these distressed ventures. South Africa has struggled from a growth perspective for the past few years and with the help of legislation, and a thorough pre-assessment, ailing and distressed businesses may be saved. / Dissertation (MBA)--University of Pretoria, 2014. / zkgibs2015 / Gordon Institute of Business Science (GIBS) / Unrestricted

<p>Background: During the year 2002 approximately 27 000 people lost their jobs because of companies filing for bancruptcy. In 2002 the number of companies filing for bancruptcy in Sweden were 6740. This is approximately twice as many as in the year of 1974 when the first major study concerning bancruptcies in Sweden was carried out. The accumulated amount of unpaid bancruptcy claims for the period 1991 – 1997 was 51 billion SEK. Several swedish banks estimates that approximately one third of these bancruptcies could be avoided. </p><p>Purpose: Create a checklist for issuing- and evaluation of company loans. </p><p>Execution: Only financial information available in annual reports have been used in this study. A targetpopulation with companies filing for bancruptcy in the year 2001 has been derived. The targetpopulation has been evaluated in comparison with a controlpopulation for the same period of time. </p><p>Outcome: Two variables, high long term liabilities to total assets and a low degree of equity to total assets, showed high predictability five years prior to bancruptcy. According to our study there are four variables useful for prediction of financial distress two to three years prior to bancruptcy. (1) An increased degree of long term liabilities to total assets, (2) a decrease in untaxed reserves, (3) decreasing profitability more than two years in a row from a already low level and (4) an increase in assets financed with long term liabilities.</p>

Background: During the year 2002 approximately 27 000 people lost their jobs because of companies filing for bancruptcy. In 2002 the number of companies filing for bancruptcy in Sweden were 6740. This is approximately twice as many as in the year of 1974 when the first major study concerning bancruptcies in Sweden was carried out. The accumulated amount of unpaid bancruptcy claims for the period 1991 – 1997 was 51 billion SEK. Several swedish banks estimates that approximately one third of these bancruptcies could be avoided. Purpose: Create a checklist for issuing- and evaluation of company loans. Execution: Only financial information available in annual reports have been used in this study. A targetpopulation with companies filing for bancruptcy in the year 2001 has been derived. The targetpopulation has been evaluated in comparison with a controlpopulation for the same period of time. Outcome: Two variables, high long term liabilities to total assets and a low degree of equity to total assets, showed high predictability five years prior to bancruptcy. According to our study there are four variables useful for prediction of financial distress two to three years prior to bancruptcy. (1) An increased degree of long term liabilities to total assets, (2) a decrease in untaxed reserves, (3) decreasing profitability more than two years in a row from a already low level and (4) an increase in assets financed with long term liabilities.

Designed financial distress prediction model is intended directly for the farmer (decision-maker) in order to diagnose the farm’s financial condition and predict the likelihood of financial distress, by using financial information of his farm. There are identified family farm characteristics in which family farms have higher risks to run in financial distress and are guidelines for the family farms that intend to more carefully monitor and control their financial condition. The aim of the research: after analysing the conception of financial distress and identifying the factors determining the financial condition as well as related indicators and prediction models, to methodologically justify and design financial distress prediction model of family farms. / Parengtas finansinio išsekimo prognozavimo modelis tiesiogiai skirtas ūkininkui, kuris panaudodamas savo ūkio finansinę informaciją, galėtų diagnozuoti ūkio finansinę būklę ir iš anksto numatyti finansinio išsekimo grėsmę. Disertacijoje nustatytos ir įvardintos ūkininkų ūkių charakteristikos, kurioms esant ūkiai turi didesnes grėsmes finansiškai išsekti, yra gairės ūkininkų ūkiams, kurie ketina atidžiau stebėti savo veiklą ir kontroliuoti finansinę būklę. Tyrimo tikslas – ištyrus finansinio išsekimo sampratą, identifikavus finansinę būklę sąlygojančius veiksnius, indikatorius ir prognozavimo modelius, metodologiškai pagrįsti ir parengti ūkininkų ūkių finansinio išsekimo prognozavimo modelį.

Narcissism refers to persistent feelings of grandiosity, a need for admiration, and a lack of empathy (American Psychiatric Association 2013). The literature has found narcissism to be associated with individuals making decisions for a firm that fulfill their egos rather than maximize firm value. The literature in psychology, however, suggests that when firms face financial distress, narcissism could be a desirable trait in an individual, enabling the CEO to take the necessary risks and make the necessary decisions for the firm to recover. I study the context under which a firm may benefit from a narcissistic CEO. In this study, I use two measures from prior literature (CEO photo prominence in the annual report and a CEO’s use of first-person personal pronouns) to form a combination measure to investigate whether firms in financial distress are more likely to appoint a CEO with more narcissistic traits. I find some evidence to support this hypothesis. I also examine whether the association between narcissism and future firm performance is affected by the economic conditions of a firm and the visibility of the firm. I find results consistent with firm financial distress increasing a narcissistic CEO’s effect on firm performance in low-visibility firms.

Abstract 2,004 in June get up erupt one after another PROCOMP and so on the land mine stock, has brought the enormous impact to Taiwan's stock market, after these land mine stocks erupt one after another, stimulated the controlling organization to strengthen the management to go on the market the cabinet company's determination, planned many reforms plans and revises many laws, from aggravated illegal criminal and accountant the responsibility, the increase information transparency and realization company internal control aspect and so on execution reduces the possibility which the similar case occurred. Economics Value Added (EVA) is the use Residual Income the idea develops one financial achievements weight target, is different with generally recognizes accountant the principle by creditor's angle establishment finance report form, EVA is looks at the company by the shareholder value viewpoint the management achievement. This research by the economical attachment value inspection document company's transport business condition, examines EVA whether can utilize forecast to the enterprise finance crisis, and one of take documents PROCOMP as the example, carries on the financial ratio analysis, so as to the comparison finance ratio analysis and EVA use in effect of the enterprise finance crisis forecast. Conclusion of the this research as follows: First, by the case study result, the EVA appraisal method may take early warning signal the document corporate finance crisis. Second, the earnings compares by EVA and accountant, EVA can comparatively early respond the company manages the bad question, that is its financial crisis forewarns the effect to compare accountant the earnings to be good. Third, by sole or the sole category finance ratio appraisal document company whole management achievements is insufficient, and is easy to cause to sentence by mistake is appraised the company the real transport business condition.

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The research of corporate financial distress prediction model is always one of the important topics in financial management; and mostly people do the research and extract sample companies based on the definition for corporate default by Taiwan Economic Journal. However, we think the timing to observe the potential corporate financial distress is extremely vital; the actual benefit will not be good even with high accuracy if relevant counterparties recognize it too late to undertake certain action for mitigating loss. The main purpose of this study is trying to alert potential corporate financial distress as early as possible, and then could contribute some to this topic. This study extracts 34 financial alerted sample companies with share prices plumped by 50% dramatically or alternatively with share prices diminished below their face value while the stock market index rose in 2007. We matched each sample company by another financially healthy company from the same industry, chose 25 financial ratios to be the variables, and running through each year by adopting logistic regression analysis. We put all variables into the regression formula and weeded out insignificant prediction variables one by one by Wald Backward Elimination, and then sieved out relatively meaningful ones. The first conclusion of this study is that we should use quarter as the financial intervals for this type of sample companies. Secondly, we found that in December and September 2007 there were three significant variables, i.e. Return on Equity (ROE), net income, operational profit ratio, inventory and account receivable to equity ratio. Thirdly, there were three significant variables in June 2007, i.e. earning before tax ratio, growth ratio of operational profit and total liability/ total equity.

This dissertation examines banks' resolution of distressed commercial mortgage loans. Following the introduction in the first chapter, the second chapter reviews the literature on banks' resolutions of distressed loans. In chapter 3, I present a model of banks' resolution decisions under information asymmetry. The model shows that banks prefer to renegotiate instead of foreclosing problem loans when there is a cost associated with revealing the quality of their mortgage portfolios. The fourth chapter presents empirical findings that are consistent with the model, i.e., that banks' resolution decisions are affected by their concerns of revealing negative information through large foreclosures. I find that larger loans are more likely to be renegotiated than smaller loans and that banks take a shorter amounts of time to renegotiate rather than to foreclose on problem loans. Secondly, the impact of loan size on the propensity to renegotiate is magnified for banks with superior past performance and for banks with lower local mortgage distress. In addition, I find that banks that raised new equity capital exhibit a stronger tendency to renegotiate larger problem loans in the previous year. In chapter 5, as a falsification test, I compare the bank-held sample with a Commercial Mortgage Backed Securities (CMBS) sample that does not share banks' mimicking motives, because special servicers of problem loans are not the originators of those loans. I find that the results are weaker or not present for CMBS, in contrast to the bank loan sample. In chapter 6, I study banks' resolution of problem loans while considering their problem loan portfolios. I consider two aspects of banks' problem loan portfolios -- their relationships with borrowers and the degree of regional diversification. Empirical results suggest that the sample banks choose to act "tougher", i.e., foreclose more, as they have more loans with a borrower. Finally, the degree of geographical diversification in problem loan portfolios may affect banks' resolution decisions. I find that as banks have geographically concentrated problem loan portfolios, they are more likely to renegotiate larger loans, measured either absolutely or relatively. Chapter 7 concludes. / text

Orientation: As required by various sections in The Companies Act 71 of 2008, the appointed practitioner in a rescue must place before the court facts proving reasonable prospect; this is mainly determined through the subjective thought process of the practitioners who rely on his/her experience and knowledge in rescue and/or business management. This appears in direct contrast to the requirements set out by several court cases. There are many questions surrounding the determination of reasonable prospect as there is no benchmark for business rescue practitioners to work towards or a prescribed process to be followed. Research purpose: This article investigates different methods available to business rescue practitioners to factually determine (initial) reasonable prospect and guide the decision making process during the initial stages of the rescue. Motivation for the study: Business rescue is still in its infancy and reasonable prospect is one of the many vague but yet mandatory for initiating business rescue procedures. A better understanding of reasonable prospect and possible ways to factually measure it will contribute greatly to the business rescue regime. Research design and approach: The research studied numerous methods of determining financial distress and decline (literature) as well as relevant cases (law) of rescue accepted or declined in court, on the basis of reasonable prospect. Triangulation of findings assisted to conclude on a series of possible tools to be utilised during the business rescue process. Main findings: Reasonable prospect is mainly based on the practitioner's experience and opinion. Factually proving reasonable prospect remains difficult due to the presence of information asymmetry and the liability of data integrity. Due diligence is important and academic methods of determining financial distress/decline/position mostly serve as a communication tool to creditors. Practical/managerial implications: Business rescue practitioners and other affected parties could benefit from the insights obtained through this study. Confirming possible methods that could assist with the factual determination of (initial) reasonable prospect can contribute to business rescue education/ development as well as avoid the current conflict that surround the subject. Practical benefits for affected parties that must use reasonable prospect are also proposed. Contribution/value add: Identifying relevant methods of determining (initial) reasonable prospect may contribute to the better understanding of business rescue and possibly help future education of BRP's. / Dissertation (MCom)--University of Pretoria, 2016. / tm2016 / Business Management / MCom / Unrestricted