This paper considers the various economic and environmental reasons that explain the bankruptcy of some companies in twenty pages. Seventeen sources are listed in the bibliography.
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will simply cease trading,. However, a tool often used is that of bankruptcy. Globally bankruptcy is declared when a company is in financial hardship and appears not to be able
to meets its obligations. The bankruptcy may be voluntary, or the result of an action brought by a disgruntled creditor. There are several types of bankruptcy. The best well known
is a bankruptcy that results in the closure of the company and the sales of the assets, with the capital that is realised paying creditors off in a set order,
secured creditors gaining priority over unsecured creditors. Bankruptcy is also a protection. In some cases a company may have severe problems, but
it is in the interests of all parties for the company to gain some portion from creditors to allow it to continue trading and ultimately pay of all debts and
create a beneficial outcome. In the United States this is known as a chapter 11 bankruptcy. However, just because this type of bankruptcy is sought does not mean there will
be a happy ending. It is still possible to subsequently file fir the other type of bankruptcy, known as a chapter 7 bankruptcy in the United States. Some turn around
have been successful such as Aimes Department Stores in the US. However, the road to recovery is very slow. It is much better if bankruptcy of any form can be
avoided in the first place. To avoid it we have to understand what it is that causes it. When we have considered the theory we can then look at applying
the theory to real bankruptcy cases. II. The Occurrence of Bankruptcies When a company declares itself bankrupt this means that its condition is insolvent. In short, this means the