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The situation of liquidity, solvency, profitability, the size of the insolvent debtor, the interests of the creditors and the court that processes the process determine if the insolvency proceeding ends in liquidation
The last doctoral thesis defended at the Polytechnic University of Cartagena (UPCT) studies the inefficiency of bankruptcy in Spain, which in 94% of the cases registered in 2016 ended with the liquidation of the company.
The figure has remained stable since 2005, according to research by José Horacio García Marí, directed by Javier Sánchez Vidal and Eva Tomaseti Solano.
"The inefficiency of the bankruptcy proceeding is explained by the size and structure of the assets and liabilities of the insolvent company and sales, which is what favors a successful resolution of the bankruptcy process to have greater size, an adequate structure of current assets with respect to to total assets and liabilities and a higher ratio of sales to total assets ", explains the author of the thesis, carried out in the interuniversity doctorate program in Economic, Business and Legal Sciences.
The analysis shows that the creditors' competitions are concentrated where there is greater economic activity and where industrial activity is greater.
In addition, a contagious effect is observed, that is, the fact that the creditors' competitions in the neighboring provinces are increasing causes an increase in the bankruptcy in the province analyzed during the same period and in the following year.
The low number of tenders that ends in an agreement between the company and the creditors, 6% in 2016, despite the fact that it is the objective pursued by the bankruptcy law, "has serious implications for the nation's productive business fabric, because it infringes upon its at a high cost in terms of unemployment and the fall of economic activity ", highlights José Horacio García.
Source: UPCT
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