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The evolution of concepts and procedures concerning the treatment of companies in difficulty

Author

Listed:
  • Silviu Ilie Saplacan

    (Aurel Vlaicu University from Arad)

Abstract

A healthy market economy is characterized by free and rapid circulation of goods and money in a circuit that continuously repeats: production-goods-money-production. In this cycle, the commerce is the motor of market economy, but the commerce freedom has given rise to competition, and this has generated commercial risk. Thus, commerce appears as an economic activity involving more or less predictable risk. Under risk an economic activity may be bankrupt when it no longer ensures procurement of necessary funds to resume the initial cycle. In general, a business failure comes after a process of continuous degradation of its economic and financial status, process predictable based on anticipated failure symptoms. Whereas in the past 20 years the issue of bankruptcy was the area of interest to many researchers and practitioners and has been addressed legally, economically and financially, we wonder why in an economy where the operators’ inability of payment is chronic, and clearly the capital of the companies decreases, their managers and clients prosper and nobody is punished for fraudulent bankruptcy.

Suggested Citation

  • Silviu Ilie Saplacan, 2017. "The evolution of concepts and procedures concerning the treatment of companies in difficulty," Social-Economic Debates, Association for Entreprenorial Spirit Promotion, vol. 6(1), pages 1-5, April.
  • Handle: RePEc:sdb:social:v:6:y:2017:i:1:p:1-5
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    More about this item

    Keywords

    Market economy; bankruptcy; predictable risk;

    JEL classification:

    • D20 - Microeconomics - - Production and Organizations - - - General
    • D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
    • D62 - Microeconomics - - Welfare Economics - - - Externalities

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