Anticipating financial distress: Could developing countries borrow from the French and the U.S. toolbox?
Photo: Khasar Sandag / IFC But many insolvency systems fall short in moving quickly to save viable businesses. This is in part because bankruptcy carries social stigma, which encourages debtors to delay recognition of financial challenges. In many countries, the absence of early warning systems, by which auditors or corporate bodies inform the directors of identified financial threats, further explains this tendency. As a result, insolvency proceedings often get started when there is nothing left to save. What could have been the reorganization of a distressed company—if tackled on time...
Source: worldbank.org