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Bankruptcy risk |
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Bankruptcy riskThe risk that a firm will be unable to meet its debt obligations. Also referred to as default or insolvency risk.Bankruptcy risk Similar MatchesBankruptcy cost viewBankruptcy cost viewThe argument that expected indirect and direct bankruptcy costs offset the other benefits from leverage so that the optimal amount of leverage is less than 100% leverage financing. Implicit Bankruptcy CostsImplicit Bankruptcy CostsOpportunity costs incurred prior to the bankruptcy process such as the loss of sales or financing. BankruptcyBankruptcyA situation where an individual is incapable of settling his/her debts and has been served a bankruptcy order by a court.The petition can either be filed by the individual concerned, or by his/her creditors. An inquiry into the debtor's affairs is made by the Official Receiver and the debtor's assets are realised and distributed among creditors.Personal pension assets are not included under the bankrupt's distributable assets for petitions made after May 29, 2000, unless the bankrupt has deliberately put assets into a personal pension specifically to avoid paying creditors. Money in occupational pensions schemes is also excluded.The equivalent process for companies is 'liquidation'. Legal bankruptcyLegal bankruptcyA legal proceeding for liquidating or reorganizing a business. Trustee In BankruptcyTrustee In BankruptcyOne appointed by a bankruptcy court, and in whom the property of the bankrupt vests. The trustee holds the property in trust, not for the bankrupt, but for the creditors. Further SuggestionsPrepackaged bankruptcyBankruptcy Bankruptcy charge Bankruptcy view Trustee in bankruptcy Voluntary bankruptcy |
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