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An exploratory study of the company reorganisation decision in voluntary administration

journal contribution
posted on 06.12.2017, 00:00 by J Routledge, David Gadenne
A primary purpose of the voluntary administration legislation is to provide a flexible procedure by which a company can attempt to reorganise its affairs and continue trading. Informed decision-making regarding which companies should attempt reorganisation is critical to the efficient operation of company rescue legislation. This paper explores decision-making associated with the voluntary administration process, with a focus on the relevance of financial information to the reorganisation decision. Statistical models are developed to provide some insight into the reorganisation decision and the problem of identifying suitable (successful) reorganisation candidates from a pool of distressed companies. Additionally, insolvency experts' decisions regarding companies' prospects in reorganisation are examined. The decision accuracy of insolvency experts was found to be significantly lower than statistical model accuracy, indicating that further development of statistical models may be a useful aid to insolvency experts.

Funding

Category 1 - Australian Competitive Grants (this includes ARC, NHMRC)

History

Volume

16

Issue

1

Start Page

31

End Page

56

Number of Pages

26

ISSN

0114-0582

Location

New Zealand

Publisher

Pacific Accounting Review Trust

Language

en-aus

Peer Reviewed

Yes

Open Access

No

Era Eligible

Yes

Journal

Pacific accounting review.

Usage metrics

CQUniversity

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