Chances of the business recovery principle in modern insolvency law

Taking the situation in the Czech Republic as an example, the study concerns
the potential of recovery procedures in dealing with business bankruptcies. Based on the
analysis of statistics, it arrives at the conclusion that despite the attempts at promoting the
importance of recovery principle under new legislation, there has been virtually no change in
the proportion of using the recovery principle to liquidation. It becomes evident that the real
obstacle in using such methods of resolving bankruptcy which enable to save a going concern
and retain jobs was not the legislation existing in the Czech Republic prior to 2008, i.e.
before the Insolvency Act became effective, but that the cause has been mainly economic.
According to the author’s conclusions, the decisive fact is that businesses enter insolvency
proceedings too late, in a time when their assets are quite insufficient to satisfy the creditors,
which means that the assets are equally insufficient to keep the business as a going concern.

#8250;

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