A comparative Analysis: Insolvency Proceedings in Countries of the Visegrad Four
15.09.2013..
Cooperation between four countries of the former communist bloc, known as the Visegrad Four, was officially established in 1991. The Czech...
Abstract
Cooperation between four countries of the former communist bloc, known as the Visegrad Four, was officially established in 1991. The Czech Republic, Slovakia, Hungary and Poland have undertaken to joint efforts leading to better integration to the western, more developed countries of Europe and subsequently to join the European Union. This goal was achieved in 2004 when the V4 countries joined the EU. In addition to continued cooperation, further cooperation with other countries is developed, especially with neighbors of V4 in fields of culture, education, science and information exchange leading to increased stability in Central Europe. These countries were also affected by the substantial financial crisis in 2007, which resulted in the deterioration of economic development especially in 2008. Even this year, all attempts fail to overcome consequences of the crisis and the GDP is still below the level before the crisis. One of the consequences of the economic slowdown and thus worsening of business environment is increasingly frequent bankruptcy of enterprises. Effort to find the most efficient setting of insolvency proceedings is now necessary in each country. If the enterprise is still in a condition for survival, the best option appears the start of reorganization. In such a case especially jobs are preserved. With increased unemployment the economy continues to slow down. However, if the rescue of the enterprise is no longer possible, bankruptcy proceedings is opened. The aim of this paper was to determine how the insolvency proceedings in the Visegrad countries is set. A comparative analysis was utilized in order to achieve this goal. The purpose was to compare the conditions for declaring a state of insolvency, possibilities for opening of the reorganization proceedings, obstacles during each procedure, duties and competences of the individual participants. Based on the findings of the analysis, attituteds of the V4 countries to the insolvency proceedings were compared and confronted with statistical findings relating to the length of the insolvency proceedings, the costs and the average rate of return. These attributes can be used to evaluate the effectiveness of the insolvency proceedings. It is interesting to compare just these countries that have faced a centrally planned economy for a long time and only a relatively short time, compared with Western Europe, they operate under market economy conditions. Besides comparing the effectiveness of insolvency proceedings, development of the insolvency proceedings was also analyzed, especially after 2007.