Sanctions and their role in preventing the appropriation of the creditor’s property rights in bankruptcy proceedings–the case of Poland

Sylwia Morawska,Błażej Prusak,Przemysław Banasik,Beata Woźniak-Jęchorek

doi:10.18559/ebr.2019.1.6

Abstract

The aim of this paper is to fill the cognitive gap regarding the role of sanc-tions in the protection of a creditor’s property rights in the event of an entrepreneur insolvency. The impact of sanctions on transaction costs, including their identifica-tion and types, as well as the impact on the protection of creditor rights, has been poorly recognized in the subject literature to date. This article investigates the theory of transaction costs and property rights by providing an identification and description of formal negative sanctions, as well as their impact on counteracting the appropria-tion of creditors’ rights in bankruptcy proceedings. These studies are part of the dis-cussion on the role of formalized negative sanctions, in terms of enforcing behaviours expected by the legislator.

Highlights

The structure of bankruptcy regulations in a given country should enable the implementation of desirable goals, i.e. maintaining economic units that have temporary economic problems and reaching a compromise with creditors by means of the debtor’s assets as much as possible
The results of the empirical research show that Polish entrepreneurs postpone applying for bankruptcy hoping to overcome financial difficulties
An efficiently functioning bankruptcy regulation system should ensure maximum reduction of the duration of bankruptcy proceedings and the quickest possible recovery by the creditors of their claims from the assets of the insolvent entrepreneur. Failure to meet this condition has a negative impact on the functioning of the economic system without eliminating from the market economy entities disrupting its proper functioning and delaying the satisfaction of creditors by insolvent debtors

Summary

Introduction

The structure of bankruptcy regulations in a given country should enable the implementation of desirable goals, i.e. maintaining economic units that have temporary economic problems and reaching a compromise with creditors by means of the debtor’s assets as much as possible. While the implementation of these two goals is seemingly connected it is important for bankruptcy to be Article received 22 August 2018, accepted 15 December 2018. 4 Poznań University of Economics and Business, Department of Macroeconomics and Development Studies, al. Economics and Business Review, Vol 5 (19), No 1, 2019 filed as soon as possible, especially by enterprises that do not foresee an improvement in their ability to compete in the market and are liable to bankruptcy. It is important to create preventive mechanisms aimed at counteracting belated bankruptcy applications and the removal of assets by the debtor (Babiarz-Mikulska, Czapracka, & Morawska, 2012). One of the elements of this mechanism are sanctions which form the main focus of this article

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Conclusion