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Archive » October 2019 » Debt restructuring and business recovery: an empirical analysis in the Italian market

Debt restructuring and business recovery: an empirical analysis in the Italian market

Ludovico Maria Cocco, Elisa Cavezzali, Ugo Rigoni,Giorgia Simion
October 2019 - n. 10
Keywords: Ristrutturazione d’impresa, piano di ristrutturazione, procedure concorsuali, rinegoziazione del debito, crisi d’impresa
Jel codes: G33, K41

Through the study of legal documents on the judicial procedures of debt restructuring, empiric evidence is offered on the operational and financial measures taken by the companies in the negotiation phase with creditors who are associated with a better recovery of the business. Focusing on the judicial restructuring of debt in the Veneto region in the decade 2006-2016, there is also an overview of the use of pre-emptive agreements and debt restructuring for the solution of Italian business crises. The results show that safeguarding corporate assets, protecting jobs and a not excessive cost-cutting are key factors in accelerating the business recovery, coupled with higher credit recovery rates. From a theoretical point of view, the paper offers a new perspective of analysis by linking what happens in the negotiation phase between the company and creditors with the post-approval business performance; from a managerial point of view, it offers operational and financial insight to facilitate the solution of the business crisis.

 

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