G33 - Bankruptcy; LiquidationReturn

The complex views of insolvency proceedings are unique, poorly known, interdisciplinary and multidimensional, even though there is a broad spectrum of different BM (Bankruptcy Models). Therefore, it is often prohibitively difficult to make forecasts using numerical quantifiers and traditional statistical methods. The least information-intensive trend values are used: positive, increasing, zero, constant, negative, decreasing. The solution of a trend model is a set of scenarios where X is the set of variables quantified by the trends. All possible transitions among the scenarios are generated. An oriented transitional graph has a set of scenarios as nodes and the transitions as arcs. An oriented path describes any possible future and past time behaviour of the bankruptcy system under study. The graph represents the complete list of forecasts based on trends. An eight-dimensional model serves as a case study. On the transitional graph of the case study model, decision tree heuristics are used for calculating the probabilities of the terminal scenarios and possible payoffs.

This paper focuses on pre-packed insolvencies prepared in the Czech Republic according to Act No. 182/2006 Coll. on bankruptcy and settlement. The analysed time period covers the years 2008-2017. The data sample contains all identified pre-packed insolvencies from the insolvency register and the financial data was extracted from the Albertina corporate database. Pre-pack insolvencies are insolvencies that begin with an insolvency proposal and accompanied by a reorganisation plan already approved by creditors. First, the paper describes the sample from different points of view and is focused on the size of the enterprise, the field of activity, the length of insolvency proceedings and the proposed insolvency administrator accompanied by an expert. Second, the paper analyses the financial situation of affected companies. The evaluation of the financial situation is based on IN indices. The insolvency proposal with a suggested reorganisation can be solved differently. The reorganisation does not need to be approved by the court or if approved, can be turned in the bankruptcy during the insolvency proceedings. The results of pre-packed insolvencies in the case of successful rehabilitation or bankruptcy are the most important findings.

This paper analyses debtors who proposed for a debt relief in a period between 1. 1. 2012 and 31. 12. 2013. Topic of debt relief has been already researched in Moravian and Silesian regions, therefore this paper concentrates mainly on Bohemian regions. The possibility of debt relief (personal bankruptcy in other words) for debtors has been in Czech legislation since year 2008 and number of personal bankruptcies has been considerably rising ever since. This paper presents only a part of ongoing research and therefore comprise only certain characteristics, such as the level and structure of debtor's income, the amount of their debt and also structure of their creditors. The data and the results of the research are analysed and compared among regions.