Sensitive Analyze as a Tool for Decision Making within Reorganization of Insolvent Company

Authors

  • Tomáš Poláček FBM VUT

DOI:

https://doi.org/10.13164/trends.2017.28.63

Keywords:

Insolvency, restructuring, decision – making tree, probabilities, creditors claim, sensitive analyze, reorganization

Abstract

Purpose of the article: The paper draws on the results of previous studies recoverability of creditor’s claims, where it was research from debtor’s point of view and his/her debts on the Czech Republic financial market. The company, which fell into a bankruptcy hearing, has several legislatively supported options how to deal with this situation and repay creditors money. Each of the options has been specified as a variant of a decision-making tree. This paper is focused on finding the upper limit for worth of reorganization through the eyes of creditors. The heuristic based on partially unknown probabilities on chance nodes replaced by intervals of probabilities variants. The result is then focused on the comparison and evaluation of the possible best variant for creditors to keep promoting reorganization as the solution for indebted company. A realistic case study is presented in full details. Further introduction of decision making with uncertainties in insolvency proceedings. Methodology/methods: Solving within decision tree with partially ignorance of probability using sensitive analyze. Scientific aim: Find the upper limit worth of reorganization within the process of insolvency. Findings: Predictions of future actions in dealing with insolvency act and bankruptcy hearing, quicker and more effective agreeing on compromises among all creditors and debtor. Conclusions: Finding a best way and solution of repayment and avoiding of termination for both of interested parties (creditor and debtor).

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Published

2017-06-01

Issue

Section

ORIGINAL SCIENTIFIC ARTICLE