Financial recovery of an enterprise: how effective is the procedure
Posted: Sun Jan 19, 2025 9:56 am
What is it? Financial recovery of an enterprise is one of the stages of the bankruptcy procedure. It is used extremely rarely, since it is considered another delay on the part of creditors. However, it is not recommended to skip this stage.
How does it work? Financial recovery does not involve external management. The current manager continues to manage the company's assets, but with some restrictions. A plan is developed, according to which measures are applied that can lead the organization out of the crisis.
The article explains:
What is financial recovery of an enterprise?
Nuances of applying the financial recovery procedure
To which enterprises is the financial recovery procedure applied?
Development of a plan for financial recovery of the enterprise
Consequences of introducing the procedure for financial recovery of an enterprise
Measures for financial recovery of an enterprise within the framework of bankruptcy proceedings
Pre-trial methods of financial recovery of an enterprise (without declaring bankruptcy)
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What is financial recovery of an enterprise?
The organization of financial recovery of the enterprise is necessary for those companies that have been affected by the bankruptcy procedure. Actions to save the business and restore solvency are an extreme measure before liquidating the entire business.
This option is not used very often, because it does not guarantee a positive outcome. Statistical data from the Fedresurs reports indicate that financial recovery of enterprises was carried out eight times in 2022 and 24 times in 2021 by various companies.
What is financial recovery of an enterprise?
The mentioned activity has something in common with the rehabilitation procedure. The only difference is that the latter is applied to the business before the trial, and financial recovery - only after the bankruptcy claim is filed.
Bankruptcy is not a critical procedure, after which it is no longer possible to save the company. There are four stages of this process, and liquidation is only the last stage. Business is closed in the most extreme case, if there is no chance of restoring solvency.
Stages of bankruptcy Process Dates of the event
Observation When a claim is accepted by the court, an insolvency practitioner is appointed. His job is to carefully analyze the financial situation in the organization, calculate the company's assets. After that, he draws up a register of creditors' claims and organizes their first meeting Up to 7 months
Financial recovery
Participants at the meeting are faced with a choice: to begin financial recovery of the enterprise or to collect a certain amount to pay off debts within the established time frame.
The court appoints an administrative manager. His duties include monitoring the implementation of the plan. The business manager retains his powers and continues to develop the business.
Up to 24 months
External management The head of the company must transfer his powers to an external manager. He is now responsible for the business and resolves issues with debts From 18 to 24 months
Bankruptcy proceedings At this stage, the company is already considered bankrupt. The bankruptcy trustee must sell the property at auction and pay off debts to creditors. The remaining liabilities are subject to write-off. The organization is liquidated From 6 to 12 m
How does it work? Financial recovery does not involve external management. The current manager continues to manage the company's assets, but with some restrictions. A plan is developed, according to which measures are applied that can lead the organization out of the crisis.
The article explains:
What is financial recovery of an enterprise?
Nuances of applying the financial recovery procedure
To which enterprises is the financial recovery procedure applied?
Development of a plan for financial recovery of the enterprise
Consequences of introducing the procedure for financial recovery of an enterprise
Measures for financial recovery of an enterprise within the framework of bankruptcy proceedings
Pre-trial methods of financial recovery of an enterprise (without declaring bankruptcy)
5 Scenarios for Using Neural cash app database Networks to Increase Website Conversion by 40%
Download for free
What is financial recovery of an enterprise?
The organization of financial recovery of the enterprise is necessary for those companies that have been affected by the bankruptcy procedure. Actions to save the business and restore solvency are an extreme measure before liquidating the entire business.
This option is not used very often, because it does not guarantee a positive outcome. Statistical data from the Fedresurs reports indicate that financial recovery of enterprises was carried out eight times in 2022 and 24 times in 2021 by various companies.
What is financial recovery of an enterprise?
The mentioned activity has something in common with the rehabilitation procedure. The only difference is that the latter is applied to the business before the trial, and financial recovery - only after the bankruptcy claim is filed.
Bankruptcy is not a critical procedure, after which it is no longer possible to save the company. There are four stages of this process, and liquidation is only the last stage. Business is closed in the most extreme case, if there is no chance of restoring solvency.
Stages of bankruptcy Process Dates of the event
Observation When a claim is accepted by the court, an insolvency practitioner is appointed. His job is to carefully analyze the financial situation in the organization, calculate the company's assets. After that, he draws up a register of creditors' claims and organizes their first meeting Up to 7 months
Financial recovery
Participants at the meeting are faced with a choice: to begin financial recovery of the enterprise or to collect a certain amount to pay off debts within the established time frame.
The court appoints an administrative manager. His duties include monitoring the implementation of the plan. The business manager retains his powers and continues to develop the business.
Up to 24 months
External management The head of the company must transfer his powers to an external manager. He is now responsible for the business and resolves issues with debts From 18 to 24 months
Bankruptcy proceedings At this stage, the company is already considered bankrupt. The bankruptcy trustee must sell the property at auction and pay off debts to creditors. The remaining liabilities are subject to write-off. The organization is liquidated From 6 to 12 m