The role of stakeholders on rejection of bankruptcy applications in the case of "poverty" of the estate: A Polish case study

Błażej Prusak , Sylwia Morawska , Joanna Kuczewska , Przemysław Banasik

Abstract

The aim of this article is to supplement the Law and Economics area of science with regard to the scope of the ex ante effectiveness of bankruptcy law using the example of Poland. Bankruptcy law is effective in the ex ante stage when it eliminates from the market insolvent entrepreneurs who cannot even afford to cover the costs of bankruptcy proceedings. In these cases, the bankruptcy court should dismiss the petition for bankruptcy because of “poverty” of the insolvent estate. As a result, the insolvent debtor should be liquidated and deleted from the register of companies. This paper investigates entities whose bankruptcy petition has been rejected due to “poverty” of the insolvent estate. The study shows that, after the filing has been dismissed, the majority of these entities are not liquidated. To determine who is responsible for this state of affairs, the article identifies the stakeholders at the time that applications are filed for bankruptcy proceedings and also after the bankruptcy petition has been rejected. The article highlights stakeholders' diverging interests, strengths, and weaknesses to assess their potential impact on bankruptcy procedures that should be dismissed due to “poverty” of the insolvent estate.
Author Błażej Prusak
Błażej Prusak,,
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, Sylwia Morawska
Sylwia Morawska,,
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, Joanna Kuczewska (FE / DEEI)
Joanna Kuczewska,,
- Department of Economics of European Integration
, Przemysław Banasik
Przemysław Banasik,,
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Journal seriesInternational Insolvency Review, ISSN 1180-0518, (N/A 70 pkt)
Issue year2019
Vol28
No1
Pages63-85
Publication size in sheets1.1
ASJC Classification3308 Law; 2003 Finance
DOIDOI:10.1002/iir.1329
URL https://doi.org/10.1002/iir.1329
Languageen angielski
Score (nominal)70
ScoreMinisterial score = 70.0, 30-09-2019, ArticleFromJournal
Publication indicators Scopus SNIP (Source Normalised Impact per Paper): 2016 = 0.959; WoS Impact Factor: 2017 = 1.0 (2) - 2017=0.852 (5)
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