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The Effect Of Changing Firm Characteristics On Capacity To Restructure, James Routledge, David Gadenne
The Effect Of Changing Firm Characteristics On Capacity To Restructure, James Routledge, David Gadenne
James Routledge
This paper examines whether changes in financial characteristics over the time prior to a firm entering insolvency administration will affect its reorganisation prospects. Prior research shows that an insolvent firm’s ability to rectify the mismatch between currently available liquid assets and current financial obligations is critical to the reorganisation outcome. Accordingly, a multivariate analysis of financial characteristics which reflect the firm’s ability to address this mismatch is presented. The results show that changes in operating performance and liquidity prior to a firm entering insolvency administration have a bearing on administration outcomes.
The Decision To Enter Voluntary Administration: Timely Strategy Or Last Resort?, James Routledge
The Decision To Enter Voluntary Administration: Timely Strategy Or Last Resort?, James Routledge
James Routledge
One of the options available to directors of financially distressed companies is to place their company into voluntary administration (VA). The decision to enter VA should enhance corporate governance because it allows for informed decision-making about a company's future, and ensures that administration of a company's affairs proceeds in an orderly manner. Once in VA, a company has a short 'breathing space' during which it can develop a strategy to address its insolvency. The strategic options available will be significantly affected by past performance and current financial position. If the company's position has deteriorated significantly, the VA process will merely …