Must Bankruptcy Administrators be Corporate Undertakers? Croatian and European Perspectives of Restructuring in Bankruptcy

Eurostat (Statistical Office of the European Communities) regularly publishes death rates of enterprises as one of the business demography reports. Building upon this terminology and perceiving that bankruptcy most often indicates near death of a distressed company, we could say that bankruptcy administrators' work is often reduced to playing the role of a corporate undertaker.However, there is an alternative in the form of restructuring, even though it is rarely practiced (both in Croatia and the European Union). In the five year period (2000-2005) only one in 677 bankruptcy cases in the largest Commercial Court in Croatia, in the capital of Zagreb, was closed by restructuring the debtor.The EU has already tackled this subject and has presented two projects: quot;Stigma of failure and early warning tools,quot; and quot;Restructuring, bankruptcy and a fresh start,quot; with the aim (among others) of promoting restructuring.In order to obtain deeper insights into problems and possible solutions in the area of bankruptcy and restructuring in Croatia, a wide survey of key bankruptcy issues was performed. Difficulties are identified, and many suggestions and recommendations for dealing with the problems are given. Our findings could be of use for many transition countries