Expert Analysis

Distressed companies are those facing financial crises not resolvable without a considerable recasting of the firm's operations, structures and finance. This can be brought about through a company's failure to make a substantial payment of principal or interest to a creditor. Distress can also be seen in terms of financial ratios, for example in terms of liquidity and longer-term solvency. The basic and most prevalent forms of corporate distress assessment are the cash flow and the balance sheet tests, which apply both to going concern and break up (insolvency) valuation. In terms of break up valuation, under the cash flow test, a company is insolvent when it is unable to pay its debts as they fall due. Under the balance sheet test, the entity is insolvent if the book value of its assets, as listed on the conventional balance sheet, is less than its reported liabilities. The notions of asset exchangeability/liquidity and time prospect of sale are of great importance, particularly for the balance sheet test, as the latter includes the assessment of assets' value, by definition (UK Insolvency Act, 1986, 123 [2]). In this article, we first present the international/UK insight and, then, the Cyprus position on the matter.

A long-standing burden on the courts in the Slovak Republic is the large number of old enforcement proceedings. Old enforcement proceedings are referred proceedings that commenced before April 1 2017, when a large amendment of the Code of Enforcement Procedure entered into force. While the new rules from this date give bailiffs strict limits for the new enforcement proceedings – two-and-a-half years for debtors who are legal entities and five years for debtors who are natural persons – no such limits existed for the old enforcement proceedings. This fact, plus the fact that old enforcement procedures could not be terminated for insolvency of a debtor without the creditor's consent, explains why there are still 2.6 million old enforcement procedures in the courts. These old enforcement procedures formally continue even though the debtor is, in most cases, insolvent and no assets are being recovered from them. If these cases continue to be completed at their present rate without state intervention, the old enforcement procedures would remain in the legal system for another 12+ years. To end this unsustainable situation, the government proposed an act on the termination of the certain enforcement procedures (Act) aimed specifically at the old enforcement proceedings, which will enter force on January 1 2020.

In October 2018 a commission of experts was formed to review the landscape of the Colombian capital markets and propose measures to boost the market as an instrument for economic growth and general welfare. The commission gathered information from the market through workshops and one-to-one meetings with market participants. After a nine-month process, the commission presented its recommendations on August 9 2019, in an 80-page document that includes more than 60 initiatives that aim to improve market regulation and conditions.