Approval of an Arrangement in the Restructuring Proceedings and the Financial Condition of Companies Listed on the Stock Exchanges in Warsaw. Is There Any Relationship?

This paper attempts to identify the financial indicators differentiating companies that are insolvent or at risk of insolvency and have successfully entered into an arrangement with their creditors from those that have not. In addition, a two-factor model for predicting the odds of an arrangement ha...

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Autores principales:	Błażej Prusak, Paweł Galiński
Formato:	article
Lenguaje:	EN
Publicado:	MDPI AG 2021
Materias:	restructuring proceedings approval of arrangement corporate finance financial condition financial stability Risk in industry. Risk management HD61 Finance HG1-9999
Acceso en línea:	https://doaj.org/article/fec96e60e8d84932a45c03b67f55534c
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spelling	oai:doaj.org-article:fec96e60e8d84932a45c03b67f55534c2021-11-25T18:08:33ZApproval of an Arrangement in the Restructuring Proceedings and the Financial Condition of Companies Listed on the Stock Exchanges in Warsaw. Is There Any Relationship?10.3390/jrfm141105231911-80741911-8066https://doaj.org/article/fec96e60e8d84932a45c03b67f55534c2021-11-01T00:00:00Zhttps://www.mdpi.com/1911-8074/14/11/523https://doaj.org/toc/1911-8066https://doaj.org/toc/1911-8074This paper attempts to identify the financial indicators differentiating companies that are insolvent or at risk of insolvency and have successfully entered into an arrangement with their creditors from those that have not. In addition, a two-factor model for predicting the odds of an arrangement has been proposed. The research was conducted using a population of companies listed on stock exchanges in Warsaw that initiated restructuring proceedings between October 2004 and 31 December 2020. Binary logistic regression was used as the research method. The research shows that the financial health of public companies in Poland, as measured by various financial indicators, has little impact on the effectiveness of a debtor–creditor arrangement. The main measure showing discriminatory features between groups of successful and unsuccessful entities is the share of short-term liabilities in total liabilities. A statistically significant influence was also recorded for the indicator showing the share of short-term receivables in the total assets. Furthermore, a statistically significant discriminatory power for both groups was recorded for the indicator showing the ratio of inventories to sales revenue. However, in this situation the selection of this measure was due to the industry diversity of the research population. The identification of these determinants and the proposed model may help courts and supervisors to divide insolvent companies into those that should be subject to liquidation or restructuring procedures at an early stage of the proceedings. Consequently, this can significantly reduce the direct and indirect costs of implementing bankruptcy proceedings.Błażej PrusakPaweł GalińskiMDPI AGarticlerestructuring proceedingsapproval of arrangementcorporate financefinancial conditionfinancial stabilityRisk in industry. Risk managementHD61FinanceHG1-9999ENJournal of Risk and Financial Management, Vol 14, Iss 523, p 523 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	restructuring proceedings approval of arrangement corporate finance financial condition financial stability Risk in industry. Risk management HD61 Finance HG1-9999
spellingShingle	restructuring proceedings approval of arrangement corporate finance financial condition financial stability Risk in industry. Risk management HD61 Finance HG1-9999 Błażej Prusak Paweł Galiński Approval of an Arrangement in the Restructuring Proceedings and the Financial Condition of Companies Listed on the Stock Exchanges in Warsaw. Is There Any Relationship?
description	This paper attempts to identify the financial indicators differentiating companies that are insolvent or at risk of insolvency and have successfully entered into an arrangement with their creditors from those that have not. In addition, a two-factor model for predicting the odds of an arrangement has been proposed. The research was conducted using a population of companies listed on stock exchanges in Warsaw that initiated restructuring proceedings between October 2004 and 31 December 2020. Binary logistic regression was used as the research method. The research shows that the financial health of public companies in Poland, as measured by various financial indicators, has little impact on the effectiveness of a debtor–creditor arrangement. The main measure showing discriminatory features between groups of successful and unsuccessful entities is the share of short-term liabilities in total liabilities. A statistically significant influence was also recorded for the indicator showing the share of short-term receivables in the total assets. Furthermore, a statistically significant discriminatory power for both groups was recorded for the indicator showing the ratio of inventories to sales revenue. However, in this situation the selection of this measure was due to the industry diversity of the research population. The identification of these determinants and the proposed model may help courts and supervisors to divide insolvent companies into those that should be subject to liquidation or restructuring procedures at an early stage of the proceedings. Consequently, this can significantly reduce the direct and indirect costs of implementing bankruptcy proceedings.
format	article
author	Błażej Prusak Paweł Galiński
author_facet	Błażej Prusak Paweł Galiński
author_sort	Błażej Prusak
title	Approval of an Arrangement in the Restructuring Proceedings and the Financial Condition of Companies Listed on the Stock Exchanges in Warsaw. Is There Any Relationship?
title_short	Approval of an Arrangement in the Restructuring Proceedings and the Financial Condition of Companies Listed on the Stock Exchanges in Warsaw. Is There Any Relationship?
title_full	Approval of an Arrangement in the Restructuring Proceedings and the Financial Condition of Companies Listed on the Stock Exchanges in Warsaw. Is There Any Relationship?
title_fullStr	Approval of an Arrangement in the Restructuring Proceedings and the Financial Condition of Companies Listed on the Stock Exchanges in Warsaw. Is There Any Relationship?
title_full_unstemmed	Approval of an Arrangement in the Restructuring Proceedings and the Financial Condition of Companies Listed on the Stock Exchanges in Warsaw. Is There Any Relationship?
title_sort	approval of an arrangement in the restructuring proceedings and the financial condition of companies listed on the stock exchanges in warsaw. is there any relationship?
publisher	MDPI AG
publishDate	2021
url	https://doaj.org/article/fec96e60e8d84932a45c03b67f55534c
work_keys_str_mv	AT błazejprusak approvalofanarrangementintherestructuringproceedingsandthefinancialconditionofcompanieslistedonthestockexchangesinwarsawisthereanyrelationship AT pawełgalinski approvalofanarrangementintherestructuringproceedingsandthefinancialconditionofcompanieslistedonthestockexchangesinwarsawisthereanyrelationship
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Approval of an Arrangement in the Restructuring Proceedings and the Financial Condition of Companies Listed on the Stock Exchanges in Warsaw. Is There Any Relationship?

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