Abstract
This conceptual article concentrates on the insolvency and recovery reforms and business survival. The aim of the research is an evaluation of the impact of insolvency law reforms on the increase of businesses’ survival. The study focuses on a comparative analysis of insolvency reforms on EU level, including the advantages and disadvantages, with a special emphasis on the Polish case, which includes some similarities and differences to other EU countries’ insolvency procedures. The article presents the concept of the most effective insolvency framework and its efficiency (as well as legal and financial framework) that gives the best results for companies to survive, to start recovery procedures and restructuring, not to go bankrupt, and not to become liquidated and eliminated from a competitive market. Taking a critical thinking approach, the article indicates the weaknesses of the existing insolvency procedures that should be improved and offers some recommendations for the future. The study covers, from a scientific point of view, the important issues that, in the face of complexity, a global, turbulent environment, and the global financial crisis, deserve an investigation. The findings and the implications are crucial not only for scientists, but also for insolvency practitioners, business and financial institutions’ representatives, and policymakers.
Highlights
IntroductionThe annual number of failures still remains above the levels before the crisis in several EU member states, and some business leaders are struggling with distress and difficult choices about the future and their companies’ survival prospects
The global financial crisis has pushed many businesses into insolvency
The Results part of this study presents the comparison of insolvency reforms at EU level and the Polish insolvency reform case emphasizing restructuring actions and, business survival
Summary
The annual number of failures still remains above the levels before the crisis in several EU member states, and some business leaders are struggling with distress and difficult choices about the future and their companies’ survival prospects. Economies around the world have undertaken reforms aimed at improving their insolvency systems. From 2009 to 2014, 60 economies implemented 87 reforms on resolving insolvency. Reforms in the area of corporate reorganization were the most common: 10 economies introduced a new reorganization proceeding, and 21 promoted reorganization or made improvements to their existing reorganization framework 104), adequate financing to ensure the continued operation of distressed businesses has been identified as one of four critical components of turnaround success—along with competent management, a viable core operation, and a motivated labor force According to World Bank Group (2016, p. 104), adequate financing to ensure the continued operation of distressed businesses has been identified as one of four critical components of turnaround success—along with competent management, a viable core operation, and a motivated labor force
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